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AUD likely to lag NZD as RBA stays on hold

TD Securities points to Australia’s RBA hold after a September decision, with the cash rate at 4.60% and no further hikes expected this year, supporting its view of continued AUD underperformance versus NZD.

Reported · Written up by our desk · Major Pairs

TD Securities Macro Research maintains a negative view on the Australian Dollar versus the New Zealand Dollar after the Reserve Bank of Australia’s September decision, arguing AUD underperformance is likely to persist.

The research notes Australia’s cash rate is at 4.60% and says it expects no further hikes this year, while also pointing to the RBA board’s acknowledgment that consumption, housing, and labor conditions are easing rather than overheating.

TD Securities adds that ANZ’s two-year consumer inflation expectations were updated, showing expectations peaked three weeks earlier, and it cites household spending data for August showing broad-based declines across six of nine categories, with headline spending flat month to month.

It further highlights that transport spending rose 2.3% month to month, but spending excluding transport fell 0.4% month to month, reinforcing the view that domestic pressures are not building.

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