Listen to the latest market mood for the AUDNZD pair.

Strong AUD, Weak NZD

The RBA met this week and they acted as the market expected by cutting interest rates to 0.10% from 0.25%, increasing bond purchases by $AUD100 billion, and also dropping the 3yr yield target to 0.10% from 0.25%. All of this was expected buy the market and the AUD had been sold into the event. It was a sell the rumour, by the fact scenario. So, the AUD was able to rally out of the RBA meeting on the news that Governor Lowe considered the RBA moving to negative interest rates as highly unlikely.

The RBNZ by contrast is open to negative interest rates for the coming year and is still to extend it bond purchases.

This opens up a AUDNZD long bias from market.

Trade Risks: The main risk to this trade is if the RBNZ meet on November 11 and walk back from negative rates.

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