What To Expect From The RBA & RBNZ Meetings? – Citi

This week sees policy decisions by both the RBA and the RBNZ and neither central bank is likely to lower interest rates and the meetings may ultimately prove low stakes for currency markets, projects CitiFX.

"Low inflation across both countries allows scope for continued easing, but indications since the last set of policy decisions seems to argue for patience.

Given weakness in AUDNZD and strength in trade-weighted NZD, there is probably more incentive for the RBNZ to strike a dovish tone, but we doubt the meeting will mark a major break in investor expectations.

For the RBA the risks are likely weighted on the other side, given that a relaxed tone from the central bank echoing its pre-CPI disappointment stance could trigger a reversal of recent very heavy selling. External factors will still act as a more powerful driver, but the overhang of short positioning presents some increased short-term risks, Citi adds.