**AUD/USD, NZD/USD, and AUD/NZD: Outlook Ahead of the RBNZ Decision**
*Adapted and expanded from an article by Matt Weller, FOREX.com Analyst, with additional market context.*
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### Forex Market Landscape: Australia, New Zealand, and the RBNZ’s Significance
The Australian and New Zealand dollars have long been favorites among currency traders, offering exposure to the dynamic, commodities-driven economies of the Asia-Pacific region. The moves of these currencies, specifically AUD/USD (Australian dollar vs. US dollar), NZD/USD (New Zealand dollar vs. US dollar), and the cross-rate AUD/NZD, are often influenced by central bank actions—to which all eyes now turn as the Reserve Bank of New Zealand (RBNZ) prepares to release its latest policy decision.
This article explores the current environment for these currency pairs, key drivers affecting them, and sets out the technical and fundamental outlook as the RBNZ meeting approaches.
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### Recent Performance: How Did AUD/USD and NZD/USD Behave?
#### Overview
AUD/USD and NZD/USD have followed moderately similar trajectories over the past six months. Both fell against the strong US dollar through late 2023 into early 2024 before finding some stability and attempting rebounds as central bank policy outlooks shifted.
– **AUD/USD:** After a prolonged downtrend in 2023, the pair stabilized around the 0.6500 level, attempting recoveries on expectations of a relatively more patient Reserve Bank of Australia, as well as improved risk sentiment globally.
– **NZD/USD:** Echoed the AUD/USD structure, but with greater volatility as stronger-than-expected domestic inflation data periodically stoked hopes of more hawkish steps out of the RBNZ.
Since mid-April 2024, both have struggled to extend gains, encountering resistance in the face of sticky US inflation, uncertainty about the Federal Reserve’s next move, and a cautious tone from domestic policymakers.
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### Fundamental Drivers: Spotlight on Interest Rates, Inflation, and Growth
#### Central Bank Focus
The monetary policy stance of both Australia’s RBA and New Zealand’s RBNZ has shaped the fortunes of their respective currencies.
**Reserve Bank of Australia (RBA):**
– The RBA has maintained a cautious stance, leaving its cash rate at 4.35 percent since its last hike in late 2023.
– Persistently sticky inflation and robust jobs data have fueled market speculation that rate cuts will not occur until later in 2024, if at all this year.
– Australian economic data has been mixed; consumer spending is sluggish and the housing market shows signs of slowing but commodity exports remain resilient.
**Reserve Bank of New Zealand (RBNZ):**
– The RBNZ’s Official Cash Rate (OCR) remains at 5.5 percent, one of the highest among major economies.
– High inflation prints—such as Q1 2024’s annualized 3.
Read more on AUD/USD trading.