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Société Générale also see plenty more downside to AUD/NZD

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The club of AUD/NZD bears is getting crowded indeed, and little wonder after yesterday. 

NZD developments:

And more from NZ today: 

Meanwhile, in Sydney the RBA tiptoes towards easing with a small change to the QE program:

SG comments:

  •  no wonder that AUD bulls continued to migrate to the NZD. Not such an enticing balance of payments story, but at least the RBNZ is likely to react to recovery and housing inflation with (much) earlier rate hikes. There’s plenty more downside to AUD/NZD.

And, more from SG on the Reserve Bank of Australia:

  • policy meeting concluded with cautious economic optimism, a mini-tapering of asset purchases to AUD$4 B per week from September onwards (from AUD5 B now), and a suggestion rate hikes aren’t likely before 2024
  • We don’t think that the RBA can prevent AUD/USD from rising further if commodity prices remain high, and as the economy recovers from the latest round of lockdowns. But the currency will remain soft enough to ensure that Australia’s current account surplus remains sizeable

AUD/NZD weekly candlestick chart

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