AUD/NZD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver currently.
Key drivers:
• Rate gap: The Reserve Bank of Australia is indicating potential future interest rate hikes, while the Reserve Bank of New Zealand has recently cut rates, widening the gap between the two currencies.
• Risk/commodities: The improving oil prices are strengthening the Australian dollar, given its status as a commodity currency closely linked to global demand.
• One macro factor: Upcoming Australian economic indicators, such as CPI data, may influence AUD movement, but current data from New Zealand indicates continued economic contraction, creating uncertainty for the NZD.
Range: The AUD/NZD is likely to hold steady within its recent range, as recent gains lack strong momentum for a significant move.
What could change it:
• Upside risk: A stronger-than-expected Australian CPI report could bolster the AUD.
• Downside risk: If New Zealand's economic outlook improves significantly, this could strengthen the NZD against the AUD.
