AUD/NZD drops to lowest in 8 weeks

The kiwi is trading practically flat against the US dollar but versus the aussie it reached the highest level since early March. AUD/NZD dropped below 1.0900 and fell to 1.0880.

The pair was about to end the week trading around 1.0890, 350 pips below the level it had a week ago. It is the worst weekly performance since August of last year.

Between RBNZ and RBA

On Tuesday lower-than-expected inflation data from Australia weakened the aussis across the board and pushed AUD/NZD to break a key support located at 1.1050, that capped the downside during March and April.

The pair dropped even further after the Reserve Bank of New Zealand (RBNZ) left interest rates rate unchanged on Thursday.

The aussie remained weak amid increasing expectations of a rate cut from the Reserve Bank of Australia, that will meet next week (Tuesday). Most analysts expect the RBA to keep rates unchanged, but they see a possible dovish bias change in the statement.

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