AUDNZD sellers at market?
Governor Lowe was very bearish during his most recent speech this week. In his speech, he pushed back against the market expectations of rate rises in 2022 and 2023. Governor Lowe maintained that the RBA’s path is set on no rate rises until 2024 at the earliest. Furthermore, he made it clear that the RBA could consider further bond purchases.
In contrast, the RBNZ now has enough vaccinations for its entire country. The GDP data out next week should show the New Zealand economy on a firm footing as the Q4 data comes. Remember that New Zealand has been one of the best nations in handling COVID-19 infection rates.
This means that the next week could see AUDNZD sellers as a potential divergence opens up between the RBA and the RBNZ.
- Any significant improvement in the outlook for Australia will invalidate this outlook.
- Any positive comments from the RBA about earlier interest rates rises will also invalidate this outlook.