BNP Paribas thinks that AUD should underperform both CAD and NZD on a relative basis and remains short AUD/CAD.
“The next key data point is Australia’s Q2 CPI on Wednesday where markets expect acceleration and would probably be more vulnerable to a downward surprise. BNP projects.
“In comments earlier today RBA Governor Stevens did not touch upon domestic monetary policy or the exchange rate in his speech,” BNP notes.
“Market expectations for RBNZ rate hikes in 2014 have been already scaled back to just 17bp after this week’s meeting, implying that the scope for the central bank to surprise on the dovish side is more limited,” BNP adds.
BNP also remains short EURNZD ahead of the RBNZ on Thursday.