RBA Governor Lowe is due to provide "An Economic Update" to a business audience at 1005 GMT today, as the market prices nearly an 80% chance of a 25bps cut in the cash rate on Oct 1. The RBA governor has previously shown a preference for tipping the market on timing and direction of their interest rate decisions through speeches rather than meeting statements or minutes, and will have the chance today to either push back against the market pricing or confirm it.
The recent minutes from the September meeting, which indicated greater concern over the global outlook nL3N2680R0, and the latest jobs report showing unemployment creeping up to 5.3% nL3N26A0K5suggest that Lowe will confirm the market's view of a 25bps cut to 0.75% next Tuesday nL3N26A0IQ. The AUD will likely weaken on such a confirmation, even though the outcome is priced in.
The recent trend higher in the AUD/NZD is starting to show signs of fatigue and the combination of a fully priced RBA cut next Tuesday and an on-hold decision by the RBNZ this Wednesday could convince longs to pare back.
A break below the 21-day MA (1.0717) would confirm a short-term AUD/NZD top is in place.
The AUD/USD will likely head towards support at 0.6675/90 ahead of next week's RBA decision.