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In the hands of RBNZ and the RBA, running towards offers

  • AUD/NZD running into supply territory, can AUD hold its QE taper bid?
  • RBNZ more dovish, but RBA on standby to do more if need be – could be bearish for the cross.

AUD/NZD is trading at 1.0549 having travelled between 1.0519 and 1.0556, rising into potential liquidity for a further surge to the downside as the Aussie losing its tapering QE advantage, or there lack of. The Reserve Bank of Australia has been pulling the strings of the bulls over, perhaps unintentionally, but lifting them up and putting the backdown on conflicting rhetoric.

RBA is saying it can do more QE

AUD/NZD has been falling under pressure with the RBA saying it can do more QE if it needs to, although the price of the Aussie has not dropped as far as it rallied (1.5%) when the RBA last hinted that it would be tapering its QE programme (conditional on improved market functioning) back on the 6th April. 

AUD/USD was down 0.5c on the day to 0.6285 as commodities took a hit from the rout in the oil market and souring risk sentiment, while NZD/USD similarly fell from 0.6040 to 0.5960, -1.3%. AUD/NZD rose a net 0.4% to 1.0540 but how far can the Aussie realistically outperform in this current environment? More on that question here: AUD/USD to struggle with USD demand and falling commodities

There was no respite in the selling in commodity markets overnight, and analysts at ANZ Bank explained that their ANZ China Commodity Index was ending the session down 3.4%.

“The collapse in oil prices sent shockwaves through the industry, with no sector spared. Industrial metals suffered the most, with copper and nickel down sharply. Iron ore was also weaker, sending the bulk commodity sector lower. The agriculture sector struggled to keep its head above water, driven by falls in palm oil and sugar. Even precious metals suffered, with silver and platinum leading the sector lower.”

Meanwhile, its a battle of the central banks as far as the cross goes, with he RBNZ still sounding more dovish than the RBA but at least the RBA has eased up, saying it can do more QE if it needs to. 

AUD/NZD levels

 

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