AUD/NZD extends downside to daily lows near 1.0800 post-RBNZ decision

AUD/NZD moves back and forth, down 0.12% intraday while taking rounds to 1.0820-10 during the initial Asian session on Wednesday. Even so, the quote seems to struggle for a clear direction after strong consumer sentiment data in Australia and the central bank’s key rates decision in New Zealand.

Starting with the Reserve Bank of New Zealand’s (RBNZ) interest rate decision, as widely expected, the central bank maintained the status quo and left the key rates unchanged at 0.25%. The Large-Scale Asset Purchase (LSAP) program of up to $100billion and the Funding for Lending Programme (FLP) operation were also kept unchanged. The cross remained unfazed by the decision.

Furthermore, Australian Westpac Consumer Confidence Index rose to 6.2% in April from 2.6% a month earlier. On the data, the Australian Treasurer Frydenberg commented, “this is an extraordinary result” on improved business conditions and consumer confidence. However, it seems aussie has already discounted all the good news, and not responding to the recent headlines.

Australia’s decision to uplift some restrictions in Queensland from Thursday amid the rejection of the J&J covid vaccine also raises doubt over the performance of aussie. By keeping an upper hand in managing the pandemic, New Zealand already deploys very strict measures against the diseases.

Against this backdrop, S&P 500 Futures trade almost flat whereas the US 10-year Treasury yield catches a breather after the previous day’s recovery moves to 1.69%.

Looking forward, a light economic calendar should highlight the US Fed Chair Jerome Powell’s speech later to gauge the market sentiment.

AUD/NZD levels to watch