Data Highlights for Economic Week Commencing 6th June ? Central Bank Decisions in Australia and New Zealand

June 6, 2016 - Written by Tim Boyer

STORY LINK Data Highlights for Economic Week Commencing 6th June ? Central Bank Decisions in Australia and New Zealand

The next major central bank news to watch out for will be New Zealand's interest rate decision tomorrow night; some economist predict a drop from 2.25% to 2%.

Pound Sterling rates may remain in a poor condition tomorrow, if no positive results materialise to push the Pound out of its current 'Brexit'-induced slump.

GBP/AUD Exchange Rate: RBA Interest Rate Decision in Focus

Last week’s session was packed with tier one economic statistics, the most significant of which was Friday’s US jobs figure which proved to be a major miss to the downside. Meanwhile, a brace of Southern Hemisphere central bank announcements provide the data highlight for the week ahead. Our leading currency analyst takes a look at the likely upshot for the region’s premier tenders below –

The Reserve Bank of Australia (RBA) leads the way during the early hours of tomorrow morning. The Australian Dollar (currency : AUD) has endured sustained selling pressure since the RBA’s previous meeting which yielded a surprise cut in its benchmark interest rate to a fresh record low of 1.75%. Another cut is considered highly unlikely for this month, but the tone of the rhetoric contained in the RBA’s accompanying statement has the potential to be market-moving.

The Pound Sterling Australian Dollar exchange rate was loitering in the low 1.8000s in the lead up to the last RBA policy decision, but the pair quickly jumped back above the two to one threshold during the sessions which followed.

The uncertainty engendered by this month’s UK European Union referendum means that the Pound remains susceptible to selling pressure, so any hints from the RBA that last month’s loosening of policy was a case of ‘one and done’ could rapidly send the GBP AUD exchange rate tumbling back down towards the 1.8000 level.

GBP/NZD Exchange Rate: RBNZ Rate Decision in Focus

Meanwhile, this month’s Reserve Bank of New Zealand policy decision follows on Wednesday night. Following last week’s GlobalDairyTrade auction results, which revealed a fall in the hammer price of New Zealand’s number one export – Whole Milk Powder – an interest rate cut is a live possibility.

The consensus amongst FX analysts is that the RBNZ will opt to trim its Official Cash Rate (OCR) by 25 basis points - a move which would see investors shift en masse out of Kiwi-denominated assets. The GBP NZD exchange rate would be likely to edge higher towards the 2.2000 threshold in such a circumstance.

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TAGS: Australian Dollar Forecasts New Zealand Dollar Forecasts Pound Austr Forecasts