RBA may hold the RBA to lower AUDUSD
As inflation slows, the Australian dollar is heading south. The RBA is less likely to be pressed into further tightening because core inflation has slowed in August, despite the volatile energy cost. The market expects that the central bank will remain at its current level for the fourth straight week. It is unclear if policymakers will hike again before year’s end or wait until spring next year. The next support is 0.6280 and a hawkish view may push the aussie over 0.6650.
NZDUSD is a victim of cautious sentiment
New Zealand Dollar falls on the back of a subdued sentiment towards risk. Growth rebounded in the second half of the year after flatlining in the first. A surprising robust economy, along with an increase in expectations of inflation over the next two years, could give the RBNZ mild headaches, since it was aiming to achieve a technical depression to muffle inflation. Rates may stay at their highst in more than 14 years. Externally, a downside risk factor is the economic deterioration in China, New Zealand’s…