NZD/USD has spent the last few sessions moving higher in choppy trading and now likely to take its lead from AUD/USD, says BNZ currency strategist Mike Jones in a morning note. "All eyes are on the RBA across the Tasman. Our NAB colleagues expect a 25bps cut. Market pricing is consistent with a 25bps cut and a 60% chance of a larger 50bps cut." BNZ adds that if a 50bps cut isn't delivered, the knee-jerk reaction will be to push AUD/USD higher. "Much will depend on the tone of the statement -- a statement that keeps market pricing of 125bps of further easing may end up weighing on the AUD." NZD/USD at 0.7566 vs 0.7515 late Friday. Jones says initial support for NZD/USD is at 0.7530; resistance expected around 0.7650.
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