Given expectations that there will be further rate cuts by the Fed, ECB and several other G10 central banks during the fourth quarter, the impact of RBNZ policy easing on NZD crosses is likely offset, says Jane Foley, FX strategist at Rabobank.
Escalation in the Middle East will undermine AUD and NZD
“While an announcement of a 50 basis point rate cut next week would likely still push the NZD lower, we would expect buyers to turn up on dips below the NZD/USD 0.62 level, with optimism that “Chinese stimulus will boost regional demand for New Zealand exports.”
“That said, given the RBA’s less dovish stance, we would look for AUD/NZD to continue its recent uptrend towards 1.11 on a 3-month horizon. A clear warning to the recent more positive tone in both AUD and the “NZD is the outlook for the broader tone of risk appetite.”
“A further escalation in Middle East tensions would support the USD and undermine the AUD and NZD. This risk underlines our preference for the AUD/NZD trade.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
