FX FUNDAMENTAL ANALYSIS
AUD/NZD Price Event Chart
$1.1012 but reversed after the BOJ announced its willingness to use a negative rate policy (one day
after the RBNZ decided
to maintain rates). This no doubt has had an effect on BOJ capital inflows. Once again it seemed that other central bank actions weighed on the AUD/ NZD cross. The BOJ action would mean that the Kiwi had the better carry than the Aussie, relative to the Yen.
On 2 February, the RBA decided to maintain its 2.00% OCR policy and the Kiwi strengthened slightly. It’s important to note the
blue) line and the repeated test of Kiwi strengthening resistance at $1.0597, since the previous November.
At Governor Wheeler increased due
the 28 January meeting2 noted
,
that “...Uncertainty about the s trength of the global economy has
to weake r
growth in the developing world and concerns about China and other eme rging market s...” whereas at the 2 February meeting3
, Governor price level (small dashes
Stevens noted that “
...Recent information sug ges ts the global economy is continuing to grow, though at a slightly lower pace
than earlier expected...” Each having a different world view.
However, both voiced parallel concerns over emerging markets, China and commodity prices; the RBA decided to maintain the OCR at 2.00%, once again giving the 50 basis point advantage to the Kiwi. The Kiwi tested its short term resistance (at $1.0597), retraced slightly but completely unwound after the 1 March RBA decision. There was nothing remarkably different in the 2 February and 1 March RBA statement. AUD/NZD moved towards Kiwi support (blue line) at $1.0954 per Aussie ahead of
32 FX TRADER MAGAZINE April - June 2016
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