Australia, NZ dollars mark time ahead of RBNZ rate outlook
- The Aussie edged up 0.1% to $0.7082, having added 0.8% last week in its fifth straight week of gains
SYDNEY: The Australian and New Zealand dollars marked time on Monday as market holidays made for lacklustre trading, while investors awaited guidance on the rate outlook from New Zealand’s central bank later this week.
The Aussie edged up 0.1% to $0.7082, having added 0.8% last week in its fifth straight week of gains.
Resistance lies at the recent three-year top of $0.71465, ahead of the 2023 peak of $0.7158.
The kiwi dollar was flat at $0.6035 after rising 0.3% last week. Support lies at $0.5920, with resistance at its recent high of $0.60925.
The Reserve Bank of New Zealand will hold its first meeting of the year on Wednesday and is considered certain to hold rates at 2.25%, having signalled the end of its easing cycle last year.
Analysts are keen to see if the RBNZ sticks with mid-2027 as the window for a possible hike in the official cash rate (OCR), as well as to hear how its new Governor Anna Breman sees the outlook.
Markets think a rise will come sooner, implying a 68% chance for September and 100% for October, even though recent economic news has been patchy at best.
Data out Monday showed electronic retail card spending fell 1.1% in January for a poor start to the year, while house prices fell 1.2% as poor weather hit sales.
“The RBNZ is likely to bring forward their projected first OCR hike to December,” said Kelly Eckhold, chief NZ economist at Westpac.
“We see them revising up their June 2027 OCR forecast by 40-50 bp to around 2.85-3%.”
“Our clients see the new RBNZ Governor Anna Breman as neutral to slightly dovish, although many understandably have not formed a view on the topic at this early stage.”
The Reserve Bank of Australia raised its rates to 3.85% earlier this month and minutes of that board meeting, due on Tuesday, could show how hawkish the members were about the outlook.
Jobs data out Thursday are forecast to show a rise of 20,000 in January after December’s blockbuster 65,200 jump, with the unemployment rate ticking up to 4.2%.
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