AUD/USD appears to be benefitting from the Reserve Bank of New Zealand (RBNZ) interest rate decision as Governor Adrian Orr and Co. unveil projections for a rate hike in the second half of 2022, and it remains to be seen if the RBA will also adjust the forward guidance for monetary policy as the central bank acknowledges that “the economic recovery in Australia has been stronger than expected.”
The RBA may show a greater willingness to switch gears as “the Bank’s central scenario for GDP growth has been revised up further, with growth of 4¾ per cent expected over 2021 and 3½ per cent over 2022,” and Governor Philip Lowe and Co. may lay out a more detailed exit strategy over the coming months as “the date for final drawings under the Term Funding Facility is 30 June 2021.”
Until then, AUD/USD may continue to negate the head-and-shoulders formation established earlier this year as it clears the March high (0.7849) in May, and the recent flip in retail sentiment may coincide with a further appreciation in the exchange rate to mimic thebehavior from earlier this year.
