- AUD/NZD bulls lining up for the RBNZ today and potential for higher highs.
- RBNZ expectations should be an anchor on the bird, especially as of the fresh lockdown in Auckland.
AUD/NZD ground higher from 1.0840 to 1.0874 overnight which was the highest since October 2018, but then eased back to 1.0845.
However, it is to be expected into the meeting today where the Reserve bank of New Zealand is expected to come across uber dovish.
There is a biasing to the cross higher when considering the divergence between the two central banks, despite the fact that the RBA has been doing more QE.
Auckland goes on lockdown
Moreover, New Zealand has put its largest city back into lockdown after recording four new Covid-19 cases, ending a 102-day streak without a local infection.
The BBC reports that a three-day lockdown was swiftly imposed in Auckland after the cases were confirmed. The four new cases are all members of a single-family. None had travelled recently.
The restrictions will come into effect on Wednesday, as authorities scramble to trace contacts of the family.
Auckland residents will be asked to stay at home, large gatherings will be banned, non-essential businesses will be shut, and some social-distancing restrictions will be reintroduced in the rest of the country.
New Zealand has fared better than other countries, recording 1,220 confirmed cases and 22 deaths since the virus arrived in late February.
Meanwhile, it’s far too soon to say what the exact implications are but the return of COVID-19 presents downside risk to the outlook, adding to our expectations for cautious and very dovish tones at the RBNZ MPS today, analysts at ANZ bank argue.
We expect the LSAP will be increased to NZD90bn over 18 months because it is a good strategic decision but that a smaller expansion (of NZD75bn over 12 months) is possible.
The return of community transmission on our shores moves the risks dial even more in favour of our view that the RBNZ will look to do more rather than less, signalling they will do whatever is necessary to support the economy. Attention will also be on what the RBNZ says about other tools. We think they will keep their options open on all fronts, adding to dovishness.
AUD/NZD levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.