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The NZD finally breaks higher against the AUD.

Written by Sam Coxhead on March 30th, 2012.      0 comments

4:41 PM (NZT)  It has certainly been an interesting week for this pairing. As previously discussed, any break out of the recent but well established .7700/.7830 range was likely to be driven by the prospect of an RBA cut to the cash rate. Interestingly, in the absence of any material economic data this week, the interest rate market has built in a 50% chance of a 25pt cut at next weeks meeting. A cut to 4.00% is a certainty by the June meeting according to interest rate pricing. The upshot of this is that we have seen the AUD underperform and the pairing finally pushing through the .7830 (1.2775) level. This opened up the way for a move to the high so far of .7888 (1.2678). So the RBA meeting will be the focus next week, at the least expect a more downbeat outlook from the RBA as the commodity markets point lower. So look to the pairing to establish a new range in the coming weeks, with levels being dependent on the comments from the RBA.
The current interbank midrate is:                                                            NZDAUD .7875                            AUDNZD 1.2698
The interbank range so far this week to date has been:                 NZDAUD .7786 - .7888             AUDNZD  1.2678 - 1.2844