Listen to the latest market mood for the AUDNZD pair.

Weak NZD, Strong AUD

There remains a divergence in play between the Reserve Bank of New Zealand (RBNZ) and the Reserve Bank of Australia (RBA).

The RBA has been shying away from negative interest rates and recently analysts have pushed back a potential further cut from October to November. The RBNZ on the other hand is still on course to use negative interest rates in 2021. At their last rate meeting, the RBNZ suggested that they could use their Funding for Lending Programme (FLP) as early as this year. This was a bearish step as this programme is a mechanism for providing cheap lending for businesses.

As long as this divergence remains between the RBA and the RBNZ, expect AUDNZD buyers from support.

Trade Risks:

  • Heavy equity selling will invalidate this outlook as the AUD tends to fall more heavily than the NZD in a risk-off environment.
  • Any Australia/China tension will invalidate the outlook.
  • Any change in central bank direction could invalidate this outlook.