Aussie and Kiwi Dollars Flat as Investors Await US Jobs Report
The Australian and New Zealand dollars remained stable on Friday as investors awaited key economic indicators from the US. The Reserve Bank of Australia's (RBA) upcoming board meeting, set for August 11, is expected to keep interest rates at 4.35%, with some analysts predicting further tightening may be necessary.
Paul Bloxham, head of Australian economics at HSBC, stated that 'our central case is that the slowdown in economic growth, weakened further by the cooling housing market, will see the jobs market loosen further.' He believes this will lead to core inflation reaching target levels, resulting in no additional rate hikes from the RBA.
Bloxham's forecast also predicts a cut in interest rates for the second half of 2027. Markets currently imply a low chance of a rate increase next week and September meeting, but rise to 44% for November due to potential alarm raised by the third-quarter inflation report.
The uncertainty surrounding US Federal Reserve actions weighed on the Aussie, with markets implying a 55% chance of a hike at its next meeting. A solid US jobs report could pressure the Aussie, while a weak outcome may see it test resistance again.