Heading into the latest RBA meeting this week it made sense to be short the AUDNZD. There were three key reasons to expect AUD weakness against the NZD.

  1. China’s growth is slowing and the AUD tends to rise and fall with China’s economic growth.
  2. The key export commodities from Australia have seen lower prices. Iron ore, coal, and copper prices have all been tracking lower on global growth slowdown worries.
  3. The veteran economist Saul Eslake sees the RBA abandoning the 50 bps rate hike going forward. He expects unemployment to rise and GDP to miss the RBA’s projections.

However, when the RBA met it took a more optimistic view of the economic outlook. Yes, it recognised growing uncertainties, but it kept an overall neutral bias in the final analysis. So, this made sense to close the AUDNZD shorts. There was no clear fundamental reason for more AUDNZD downside.

Major Trade Risks: The major trade risk would be that the AUDNZD keeps falling despite the more neutral approach from the RBA.

HYCM clients can access the Seasonax product in order to analyse over 25,000 currency pairs, indices, commodities, as well as individual stocks. Please contact your account manager for a free trial. Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.


HYCM Lab is a financial analysis source that provides regular insights on how global news affects the markets including forex, commodities, stocks, indices, and cryptocurrencies*. Run by the HYCM team, it equips traders with everything needed to make informed trading decisions.