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Feb 02 - 10:55 AM

ANZ: RBA on Hold Next Week: Looking to Go Long AUD/NZD After the Meeting

By eFXdata  —  Feb 02 - 09:30 AM

Synopsis: ANZ forecasts no change in the upcoming February Reserve Bank of Australia (RBA) meeting, suggesting a stable interest rate environment. The bank observes a pattern of AUD selling pressure ahead of RBA meetings, a trend likely to continue, influenced by global risk sentiment and recent US economic data. However, ANZ advises investors to consider long positions in AUD/NZD following the RBA's announcement, anticipating potential upside once the meeting's uncertainty is resolved.

Key Insights:

  • Steady RBA Stance Expected: ANZ predicts the RBA will maintain its current interest rate policy, aligning with the bank's cautious approach observed throughout 2023.
  • Pre-RBA Meeting AUD Dynamics: Historical trends indicate a tendency for the AUD to face selling pressure leading up to RBA meetings, a pattern expected to persist.
  • China's Stimulus and Economic Data: Despite China's recent stimulus announcements, persistent challenges in the Chinese economy may limit the positive impact on the AUD.
  • Global Risk Sentiment's Role: The AUD's near-term direction is closely tied to global risk sentiment, particularly influenced by US labor market data and the Federal Reserve's policy outlook.

Conclusion:

ANZ suggests a tactical approach for AUD/NZD investors, recommending patience until after the RBA's February meeting. Given the anticipated no-change policy stance and the AUD's behavior around RBA decisions, opportunities for long positions in AUD/NZD may emerge, offering potential gains once market uncertainties are alleviated. This strategy accounts for both domestic policy expectations and the broader influence of global economic indicators on AUD dynamics.

Source:
ANZ Research/Market Commentary

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