Aussie and Kiwi Drag Without Signal Interest Increases Again

The central bank of Australia and New Zealand did not change interest rates in this week's announcement. As a result, AUD/USD and NZD/USD are depressed.

The economic situation forced various countries to begin to stop the "competition" interest rate that has been going on since last year. Among them, Australia and New Zealand.

The central bank of the two countries decided not to change interest rates in this week's announcement. As a result, AUD/USD and NZD/USD are depressed at the lowest level since November 2022.

Aussie and Kiwi Drag Without Signal Interest Increases Again

The Reserve Bank of Australia (RBA) held the first regular policy meeting under its new leadership, Michele Bullock, on Tuesday (3/September). On that occasion, the RBA decided to maintain an interest rate of 4.1%. The RBA seeks to keep expressing hawkish bias, but experts no longer take into account the increase in advanced interest.

Bullock emphasizes readiness to raise interest rates again if needed to reach the inflation target within the specified time period. He added that "the council will continue to pay attention to developments in the global economy, household expenditure trends, as well as the prospects of inflation and labor markets" in future decision making.

Also Read

Anneke Thompson, Head of Creditwatch Economist, believes that the RBA decision is influenced by continuous weaknesses in consumer trade and trust, as well as declining trends in core inflation. He also warned that job vacancies continue to decline and can cause Australian unemployment rates to increase again in the coming months.

If the economic prospects are truly gloomy, the RBA no longer has space to raise interest rates. A similar situation was faced by the Reserve Bank of New Zealand (RBNZ).

The results of the RBNZ meeting this morning (4/September) showed a relatively more dovish attitude than RBA. RBNZ maintains an interest rate of 5.5% and does not provide any instructions for further increase. They only repeat the promise to maintain high interest rates in a longer period, while emphasizing the outlook "remains the same" as in the discussion last August.