AUD & NZD Dollar on New 2019 Highs
AUD & NZD Dollar has reaches above 1.0729, it’s 2019 highs. Both the Australian Dollar and the New Zealand Dollar face many of the same risks from the trade war between China and the US. In a nutshell, a slowdown in China would cause a slowdown in both the Australian and New Zealand economies, as both are large exporters to China. So why is the Australian Dollar outpacing the New Zealand Dollar? Q2 GDP for Australia is at 0.5% (MoM), however the RBA expects growth to strengthen gradually around trend over the next couple of years. The RBA held rates steady at its last meeting at 1.00%. In contrast, the RBNZ surprised the market by cutting 50bps to 1.00% at its August 7th meeting and said that growth has slowed and that headwinds continue to strengthen. Should economic growth slow more than the RBNZ expects, they have said they are willing to lower interest rates even further. Next week, New Zealand releases GDP for Q2. Previous G...