Aussie and Kiwi hold steady as bond rally fuels rate cut hopes

The Australian dollar (AUDUSD) recovering from a three-month low overnight. Against the surging yen (AUDJPY), the Aussie lost overnight, hitting its lowest since March.

The New Zealand dollar (NZDUSD) was up, rallying from its recent three-month trough. Much of the kiwi’s move came as markets priced out any chance of a rate rise from the Reserve Bank of Australia (RBA) following favourable inflation data.

Markets now imply a small chance of a cut at the RBA’s meeting, compared to the risk of a hike before the data. They also suggest there's a chance that the cash rate could be cut as early as November, while a quarter-point easing is priced for December.

Read more to discover the recent market developments for AUDUSD and NZDUSD here.