AUD/NZD rides highs on weak NZ economic outlook and hawkish RBA

Source Fxstreet
  • Buyers steer AUD/NZD upwards, raising the pair near 1.0990 and then stabilizing at 1.0970.
  • Firms in New Zealand expect a deterioration of the economic outlook according to the NZIER Survey of Business Opinion.
  • RBA minutes from the June meeting confirmed a hawkish stance from the RBA.

The AUD/NZD buyers took the initiative on Tuesday. The steady stance by the Reserve Bank of Australia (RBA) seen in the latest minutes has raised market speculation for an interest rate hike in the August meeting, providing impetus to the pair's upward movement. The gloomy outlook in New Zealand is also pushing the pair upwards.

In New Zealand, the market is focused on the Q2 NZIER Survey of Business Opinion (QSBO) released this Tuesday. The survey showed that a great portion of the firm's survey expects a slowdown in the New Zealand economy over the coming year. Regarding the Reserve Bank of New Zealand, contrary to market expectations for a cut in November, the bank has its first rate cut planned for Q3 2025. However, if the economy shows more signs of weakening, the bank might consider earlier reductions.

Meanwhile, in Australia, the RBA's June meeting minutes underscored the bank's hawkish stance. Key reasons for maintaining the policy rate included uncertainty around consumption data and clear financial stress on many households and reaffirmed its intention of doing anything necessary to bring inflation down which boosted bets on a hike. The upcoming May Retail Sales data, due this Wednesday, is expected to further tilt the scale in favor of an RBA policy rate hike. In light of this and the stubbornly high inflation, markets now see nearly 40% odds of a rate hike on September 24, rising to nearly 50% for November 5.

AUD/NZD technical analysis

Short-term, the technical view of AUD/NZD remains bullish, but indicators nearing overbought conditions may indicate that a correction looms. The Relative Strength Index (RSI) is approaching 70 and the Moving Average Convergence Divergence (MACD) is printing rising green bars.

On the downside, supports are lining up at 1.0950, 1.0930, and 1.0900. The 1.1000 target is the next resistance for the purchasers. The risks of a potential correction seem to loom, but as long as the cross maintains its position above the 20, 100, and 200-day Simple Moving Averages (SMA) the outlook will remain positive.

AUD/NZD daily chart

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonightThe dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.
Author  Suzie
Sep 22, Tue
The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Memory chips surge, Nasdaq notches a second straight record close — why the Dow fell 185 points anywayMicron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.
Author  Irene Q.
Sep 23, Wed
Micron gained 5%, SanDisk 6.8%, Seagate 4% and Western Digital 3% as the memory complex led the Nasdaq Composite to a second consecutive record close of 27,244.28. But the Dow fell 185 points as JPMorgan, Wells Fargo and Schwab slid more than 3% each — a split tape that says more about positioning than about the economy.
placeholder
Gold Price Forecast: XAU/USD drifts toward $4.300 with bears gaining tractionGold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.
Author  FXStreet
Sep 23, Wed
Gold (XAU/USD) retraces Tuesday’s gains on Wednesday and drifts lower, approaching the $4,300 area as the US Dollar Index (DXY) rallies further amid high US Treasury yields.
placeholder
US input costs rose at the fastest pace in four years — the September flash PMI beat is an inflation story, not a growth storyUS September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
Author  Suzie
19 hours ago
US September flash PMIs came in far above expectations, with the composite at 58.4, a five-year high. But the detail that moved markets was input cost inflation at its fastest since October 2022, driven by fuel, transport and supply shortages. Brent is back above $100 and the 10-year Treasury yield has hit its highest since 2007.
Related Instrument
goTop
quote