This week sees the Reserve Bank of Australia meeting. The base case is that the RBA will not raise rates until 2024. That is despite the last inflation reading moving back up into the RBA’s 2-3% target. So, the meeting tomorrow will be in key focus. Will the RBA maintain their dovish focus? Or will they give the AUDNZD reason to rally? Look at the very interesting seasonal pattern that exists between the AUD and the NZD.
Over the last 10 years, the AUDNZD has fallen 9 times between November 04 and December 19. The average loss has been -2.12%. The largest gain was +0.23% in 2011 and the largest loss was -6.07% in 2014. There is never any guarantee that this seasonal pattern will repeat again this year. However, it is very helpful to notice when these strong seasonal patterns are in place.
Major Trade Risks: The main risk to this seasonal pattern would be if the RBA takes a more hawkish outlook that brings forward interest rate hikes from 2024.