Synopsis:
ANZ provides a mixed short-term outlook for AUD and NZD, with AUD facing domestic support from RBA hawkishness, yet vulnerable to CPI outcomes, while NZD continues to struggle against declining risk sentiment, albeit with potential year-end seasonal strength.
Key Points:
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AUD/USD: Currently holding above 0.66, but lacking support from the 200-day moving average. Strong RBA data and labor market strength have bolstered AUD, especially against NZD.
- ANZ expects no RBA rate cuts before February 2025.
- Upcoming Q3 CPI is pivotal: a stronger-than-expected print may help limit AUD/USD losses, while a weaker CPI could trigger further downside.
- Persistent net buying below overbought levels indicates some resilience but may shift based on Q3 CPI results.
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NZD/USD: Struggling as risk appetite wanes; recent declines are near August lows at 0.5975.
- NZD faces near-term pressure from worsening risk sentiment and upcoming US election and NFP data.
- Seasonal patterns indicate potential for a Q4 rebound, driven by stronger NZ exports and the “Santa Rally” effect in equities.
Conclusion:
ANZ anticipates that while AUD has potential support from RBA hawkishness, its resilience will depend on upcoming CPI data. Meanwhile, NZD may face near-term pressure but could see a seasonal uptick towards year-end as exports improve and risk sentiment stabilizes.