RBA puts an end to tightening, AUDUSD falls
As the Australian dollar falls, it is supported by a slower pace of consumption. Data show that households are feeling the pinch of tighter monetary policy with February’s retail sales falling well short of expectations. Consumer spending will continue to moderate as higher interest rates are expected to take effect in the coming months. The RBA could then justify a pause on rate hikes. Uncertainty in global financial markets could be another reason for the central bank to keep its April meeting at a standstill. 0.6770 represents a new resistance, while 0.6500 is the nearest support.
NZDUSD is a step ahead of RBNZ
The New Zealand dollar continues to consolidate ahead of the RBNZ policy outlook. The RBNZ standard for short-term inflation expectations is 5.5%. As inflation continues to rise at a rate that is nearly three decades high, and well above the target of 2%, it will take some time for restrictive interest rates in the system’s favor. The question is how patient policymakers are willing to wait. The central bank will have to provide concrete evidence that there is a downward trend in consumer prices.