- AUD/NZD is firmer following Tuesday's GDP report.
- Central bank divergence between RBNZ / RBA keeps a lid on recovery.
AUD/NZD is currently trading at 1.0426 and between a low of 1.0410 and 1.0429.
Both nations are experiencing a rise in covid cases but the Aussie is lagging the kiwi due to central bank divergences.
While there is a rise in cases in New Zealand, it is not something that analysts believe will derail OCR hikes by the Reserve Bank of New Zealand.
in contrast, the Reserve Bank of Australia is expected to announce a delay in the planned reduction of its weekly bond purchases next week.
''An alternative choice is to continue with taper, but delay the next review until February. We think a simple delay is much easier to communicate than this alternative,'' analysts at ANZ Bank explained.
''We would emphasise that this decision is likely to be a close call.''
Meanwhile, last month, Melbourne marked 200 days of lockdown since the pandemic began and is in the midst of its sixth lockdown.
New local cases jumped to 120 in Victoria from 76 a day earlier. Of the new cases, 100 have spent time in the community while infectious.
Victorians have also been subjected to an extended lockdown due to a Delta outbreak and Premier Daniel Andrews yesterday conceded Melbourne was likely to be subjected to "very significant restrictions" for several weeks.
The delta risks have dampened yesterday's Gross Domestic Product beat for they will play into the third-quarter numbers.
Meanwhile, the Aussie may enjoy some relief in the current weakness in the greenback.
On Wednesday, the US dollar dropped after the ADP National Employment Report showed private payrolls rose by 374,000 in August, up from 326,000 in July but well short of the 613,000 forecasts.
The US dollar, as measured against a basket of currencies in the DXY index ended around 0.13% lower and near to 92.500.
The index had fallen to as low as 92.378 on the day, just points above the structural support of 92.344.
In Asia, DXY is sat at 92.50 and waits for the next catalyst in Friday's Nonfarm Payrolls and US Consumer Price Index ahead of this month's Federal Reserve meeting.
Weekly chart
Meanwhile, the weekly outlook is compelling.
If this week manages to close as is, then the hanging man could equate to a subsequent bullish structure over time, putting in a floor in this current downtrend from prior weekly support from April.
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