**AUD/USD, NZD/USD, and AUD/NZD Analysis Ahead of the RBNZ Decision**
*Adapted and expanded with credit to Manish Jaradi, author of the original article on ForexFactory.*
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**Introduction: Key Antipodean Forex Pairs in the Spotlight**
The focus in the forex market shifts this week to the New Zealand dollar (NZD) and Australian dollar (AUD), especially ahead of the Reserve Bank of New Zealand’s (RBNZ) highly anticipated monetary policy meeting. Investors are wary of shifting expectations regarding rate cuts from both the RBNZ and the Reserve Bank of Australia (RBA). This meeting could heavily influence a number of currency pairs connected to Australia and New Zealand, notably AUD/USD, NZD/USD, and AUD/NZD.
This article presents a thorough technical and fundamental analysis of these forex pairs, discusses drivers that could affect trading in the Asia-Pacific region, and incorporates expanded information and recent data. In addition, it draws on other authoritative sources such as Bloomberg, Reuters, and RBNZ official communications, providing a comprehensive look at my outlook for these currency pairs.
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**1. Macroeconomic Background for the Antipodean Currencies**
The New Zealand and Australian economies are closely connected, but each faces distinct policy and economic challenges:
– **Australia (AUD)**:
– The RBA paused its tightening cycle, expressing increased concern around persistent domestic inflation.
– Labor market data have been moderately robust, but household consumption is slowing.
– Market pricing for rate cuts has recently shifted, with fewer cuts expected this year due to sticky inflationary pressures.
– **New Zealand (NZD)**:
– The RBNZ paused rate hikes in early 2024, but left open the possibility for further tightening if inflation remains elevated.
– New Zealand’s economic growth is comparatively weaker, experiencing technical recession earlier this year.
– Inflation has moderated but remains above the RBNZ’s target band.
– Traders speculate on the timing and size of future rate adjustments and whether the RBNZ adopts a more hawkish stance at this meeting.
– **Global Influences**:
– US dollar strength and US Federal Reserve policy have spilled over into the Antipodean currencies.
– Chinese economic data is crucial for both Australia and New Zealand, as China is a significant export market.
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**2. The Reserve Bank of New Zealand’s June Meeting: Market Expectations**
The spotlight is on RBNZ’s June meeting, as perceptions have shifted from dovish expectations (signaling rate cuts) to a cautiously hawkish bias, citing persistent core inflation and wage growth.
*Key areas to watch:*
– The RBNZ’s policy statement and economic forecasts.
– Changes in the projected official cash rate (OCR) track.
– Commentary on risks from global markets and domestic pressures.
Market-implied pricing before the meeting had suggested at least one cut before year-end, though sticky inflation data and
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