The Reserve Bank of New Zealand (RBNZ) cut rates by 50bps to4.75%, as we expected. The NZDUSD fell 1.3% to its lowest level in almost two months, while our recommendation to be long AUDNZD is up 0.8%.
•While the RBNZ debated a 25bp or 50bp cut, it opted for the larger move as it believes this is more consistent with its inflation mandate and could help to avoid unnecessary instability in output and employment.
•We reiterate our forecasts for the NZDUSD to decline to 0.58 by year-end, though we see downside risks to this estimate as we now expect a 50bp cut in November (previously 25bps). Markets have already largely priced in this view
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!