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AUD/NZD slips as RBA-Cash-Rate gap faces Australian jobs test

The RBA is widely expected to lift the cash rate to 4.60% on September 29, while New Zealand is forecast to hold at 2.75%, keeping the cross sensitive to Thursday's Australian employment data.

Reported · Written up by our desk · Major Pairs

The Australian dollar is easing against the New Zealand dollar, with AUD/NZD trading just above 1.2400 after a Tuesday peak just under 1.2500, the highest level since early 2013. The move is on track for a second straight down day, tied to expectations around the interest-rate gap between the two central banks.

FXStreet said the gap has been driven by Australia’s higher policy rate and that the Reserve Bank of Australia is at 4.35%, with a widely expected increase to 4.60% on September 29. The Reserve Bank of New Zealand is at 2.75%, and its forecast points to no change on October 28, after the RBNZ’s September 2 hike.

Thursday’s Australian employment report is set for 01:30 GMT, with forecasts calling for 20K job growth and a steady 4.5% jobless rate. FXStreet said a strong result would support the path for the September 29 RBA hike, while a soft reading could raise doubts about it.

In the technical outlook, 1.2450 is described as resistance after Wednesday’s bounce, and a break above 1.2500 would invalidate a cautious short bias. Support is centered around 1.2400, followed by 1.2350 and then 1.2300, levels referenced as areas that previously capped the pair earlier in the year.

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