AUD/NZD Outlook:
Bullish, as the rate is above its recent average, trading near recent highs.
Key drivers:
• Rate gap: The Reserve Bank of Australia has recently raised interest rates, while the Reserve Bank of New Zealand is signaling potential cuts, widening the rate gap in favor of the AUD.
• Risk/commodities: High demand for Australian commodities, particularly driven by renewed economic activity in China, supports the AUD against the NZD.
• One macro factor: Australian inflation data exceeded expectations, increasing speculation of further rate hikes from the RBA, which strengthens the AUD's appeal.
Range:
Expect the AUD/NZD to hold its ground near recent highs while remaining within the stable range observed.
What could change it:
• Upside risk: A surge in commodity prices could boost the AUD further.
• Downside risk: A deterioration in consumer confidence in Australia may pressure the AUD.