One other 25bp charge reduce by the Reserve Financial institution of New Zealand on 28 Might appears doubtless. Markets are totally pricing it in, following the RBNZ’s earlier indications that development stays a significant concern, ING’s FX analysts Francesco Pesole and Chris Turner word.
US-China commerce tensions can drive AUD/NZD to 1.10-1.11
“Nevertheless, market pricing for 2 extra cuts after Might appears to be like somewhat too dovish given non-tradable inflation remained elevated at 4% and the unemployment charge flattened at 5.1% within the first quarter.”
“The Kiwi greenback ought to maintain appearing as a lower-beta model of AUD to commerce information. Additional de-escalation in US-China commerce tensions can drive AUD/NZD again to the 1.10-1.11 space the place it traded at first of this yr.”
