Australia, NZ dollars pinned near multi-month lows, RBA set to hike
TLT•The Australian and New Zealand dollars stayed near multi-month lows as markets priced in a 25-basis-point Reserve Bank of Australia hike to 4.60% and an 80% chance of a quarter-point Reserve Bank of New Zealand hike to 3.0% on October 28.
1. Currencies near lows
The Australian dollar was flat at $0.7020 on Monday after falling 1.5% last week to an eight-week low of $0.7004. It broke support at its 200-day moving average of $0.7025, while the New Zealand dollar hit a three-month low of $0.5650 after losing 1.1% last week.
2. Rate decisions ahead
Markets considered a 25-basis-point RBA hike to 4.60% on Tuesday all but certain, with about 40 basis points of further tightening priced in afterward. Australia is due to publish August inflation data on Wednesday; forecasts center on 4% annual headline inflation, up from 3.5% in July. Markets imply an 80% chance that the RBNZ will raise its rate by a quarter point to 3.0% on October 28. HSBC economist Paul Bloxham said an October hike was more likely after recent hawkish remarks, and expects two more hikes in the second half of 2027.
