Widening rate differentials, in the wake of yesterday's NZ budget, have weighed on AUD/NZD as the pair printed its lowest level since 11 May before marginally paring losses.

BNZ adding 25bps to their RBNZ rate projection also weighed, the bank now sees the RBNZ raising the OCR to 5.75% in July.
Rate differentials, observed via 2 year swap rates, sit at -158bps a touch above cycle lows of -165bps. On Wednesday the spread was at -135bps.
Bears look to target low from 5 April ($1.0588), a break through here opens up 2022 lows at $1.0471.
On the upside bulls first look to break 20-Day EMA ($1.0702), from here they can target the 200-Day EMA ($1.0838).
On the wires in ~10 minutes we have NZ April Trade Balance, there is no estimate the prior read was a deficit of $1.273bn.

Bullet Markets Foreign Exchange News Homepage

Brendan McKeating

Bullet Markets Foreign Exchange News Homepage

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