AUD and NZD will keep trading stronger for now - Commerzbank

Esther Reichelt, analyst at Commerzbank notes that the Fed’s hesitant stance is making live difficult for the other central banks.

Key Quotes

“Both the AUD and the NZD recently appreciated against the US dollar although the respective central banks lowered interest rates.” 

“It is impossible for these central banks to offset the USD-weakening effect of a hesitant Fed. Therefore, both AUD and NZD will keep trading stronger for now, which might prompt their central banks to further rate cuts in an attempt to fight low inflation.” 

“Another rate cut is also planned by the Norges Bank – even with inflation way above target. Until now, however, this has not kept the Norges Bank from lowering rates. We have therefore raised our EUR/NOK forecast significantly.”