- AUD/NZD takes offers to refresh multi-day low on RBNZ’s hawkish move.
- RBNZ matches market forecasts of announcing 0.75% OCR hike.
- Cautious optimism also favors upside momentum despite downbeat Aussie data.
- Speech from RBNZ Governor Adrian Orr, risk catalysts will be important for fresh impulse.
AUD/NZD stands on the slippery ground as it drops to the lowest levels since early April after the Reserve Bank of New Zealand (RBNZ) announces its latest Interest Rate Decisions on Wednesday. That said, the quote slumped to 1.0763 during an initial reaction before taking rounds to 1.0780 by the press time.
The cross-currency pair’s latest move could also be linked to the market’s risk-on sentiment, as well as the downbeat readings of Australia’s preliminary S&P Global PMIs for November seem to challenge the pair buyers of late.
RBNZ matched market forecasts while announcing 75 basis points (bps) of a rate hike during its updates to convey the tenth interest rate lift. It should be noted, however, that downbeat economic forecasts suggesting recession in 2023 and sour comments from New Zealand Finance Minister Grant Robertson, suggesting a recession is on the doorstep, seemed to have challenged the AUD/NZD bears of late.
Earlier in the day, Australia’s S&P Global Manufacturing PMI eased to 51.5 versus 52.4 expected and 52.7 prior whereas the Services counterpart dropped to 47.2 from 49.3 previous readings and 49.1 market forecasts.
Covid fears from China and mixed comments from Reserve Bank of Australia’s (RBA) Governor Philip Lowe, rejecting any pre-set path, seem to favor the AUD/NZD bears.
While portraying the mood, stocks in Europe and the UK, as well as Wall Street, closed positively whereas the US 10-year Treasury yields dropped six basis points (bps) to 3.76%. That said, the benchmark bond coupons remain mostly unchanged near 3.75% while S&P 500 Futures struggle for clear directions near 4,011 at the latest.
Moving on, a press conference from RBNZ Governor Adrian Orr will be closely watched for immediate directions as traders will seek more clues backing the latest hawkish move from New Zealand’s central bank. That said, the comments on the quarterly economic outlook and the OCR peak will be closely observed.
AUD/NZD pair’s sustained trading below the 50% Fibonacci retracement level of September 2021 to 2022 upside, near 1.0885 by the press time, keeps sellers hopeful of testing the 61.8% Fibonacci retracement surrounding 1.0740, also known as the Golden Ratio.
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