Goldman Still Favour NZD Vs. AUD

Goldman Sachs note that "in contrast to widely-held expectations the RBNZ decided to forego a hike until later this year, following the enactment of a snap lockdown in response to renewed COVID transmission in New Zealand. That said, the latest meeting statement and Governor Orr's comments in the press conference emphasised that policy tightening remains imminent. Consistent with this message, our economists see high odds of a 25bp rate hike at both the October and November meetings. The market has largely priced in near-term rate hikes, but we think the hawkish guidance should still keep NZD relatively supported - particularly versus AUD - and we still see scope for a higher terminal rate to be priced into the OIS curve."

• "That said, a longer-than-expected Delta outbreak could pose downside risk to NZD as it may delay the hiking cycle even further. Given similar risks in Australia, and our much more dovish views on the RBA outlook, we continue to forecast AUD/NZD downside (with a 6-month target of NZ$1.01)."