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AUD/NZD Will 1.0600 Be Tested Again?
Next week the focus will be on FOMC, but the real market mover may be the RBNZ meeting which could establish the direction of the kiwi for the foreseeable future. The kiwi has been under strong pressure over the past few weeks on the assumption that RBNZ will cut rates next Wednesday.
Certainly the inflation figures are way below the central bank estimate staying only at 0.1%. Nevertheless they are positive and the central bank may want to keep its ammunition in reserve until the economic conditions deteriorate and monetary stimulus would make more sense, So, if the RBNZ holds rates steady, all the selloff in the kiwi may be unjustified and the pair could bounce taking AUD/NZD down to another retest of 1.0600.