- AUD/NZD tiring as the OCR has already been cut 75bp this year to 1.00% yet RBA needs to make a move.
- Rising trade tensions put global growth at risk and sentiment took a hit.
AUD/NZD has been bleeding out to the downside, taking on the 23.6% Fibo and the 13th August highs below the 200-hour moving average as the AUD takes the brunt of the trade war damage. This follows the AUD performing badly on Friday, as rising trade tensions put global growth at risk and sentiment took a hit.
“Expect both currencies remain at the whim of global sentiment, with little data out in Australia this week,” analysts at ANZ Bank argued.
The risk here is that the Reserve Bank of New Zealand’s preemptive rate cut will be a one and done scenario for the time being. The OCR has already been cut 75bp this year to 1.00%. Instead, the dovish sentiment will shift back to the Reserve Bank of Australia, which means the Aussie can come under more pressure and give back territory with respect to AUD/NZD. The Yuan hit anotehr fresh high which is also weighng on AUD.
RBNZ to cut one again?
However, analysts at ANZ Bank argue that there will be another rate cut sooner than later: “We expect a further cut to 0.75% in November, with the risks being skewed towards sooner and/or more. But there are signs that the OCR is already losing a degree of traction on bank lending and deposit rates – one of the key channels through which monetary policy affects the economy,” analysts at ANZ Bank wrote.
AUD/NZD levels
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