During the Asian session on April 9th, the Australian dollar and New Zealand dollar rebounded slightly, with the Australian dollar currently trading around 0.5968 against the US dollar, up about 0.2%; The New Zealand dollar is currently trading around 0.5532 against the US dollar, with an increase of about 0.1%; Under the shadow of the global economic downturn, the Australian dollar and the New Zealand dollar, the "twin commodity currencies", are facing severe challenges. Although the Federal Reserve's policy shift has brought a glimmer of hope, the shadow of US tariffs on Asia remains lingering, making the rebound of these two currencies particularly fragile.

The "gentle knife" of the Reserve Bank of New Zealand has caused market shock. The bank only cut interest rates by 25 basis points to 3.5%, lower than the market's expected 50 basis points. This unexpected decision gave the New Zealand dollar a brief respite. However, the warning in the policy statement about the "risk of a global trade war" was like cold water, and the New Zealand dollar/US dollar struggled to recover after hitting a five-year low of 0.5483, rising to around 0.5560 at one point. The market generally expects that with another interest rate cut almost certain in May, the year-end interest rate may fall below the 2.75% mark.

The Australian economy is facing a dilemma of "having wolves in front and tigers behind". As a major exporter of resources, Australia not only needs to cope with the continuous decline in commodity prices, but also face the impact of the slowdown in economic growth of its major trading partners. The Australian dollar/US dollar has received weak support at the key level of 0.5900, but technical analysis shows that once it falls below this level, it may quickly explore the March 2020 low of 0.5510. The market generally expects that the Reserve Bank of Australia may deliver a heavy blow at its May meeting, cutting interest rates by 50 basis points at once.

summarize

The current Australian and New Zealand currencies are caught in a dilemma: on the one hand, they need to cope with the pressure of domestic economic slowdown, and on the other hand, they need to be vigilant about the spillover risks of deteriorating global trade environment. Economists warn that if US tariff policies continue to escalate, the central banks of both countries may be forced to initiate an "emergency interest rate cut" mode. The future trend will depend on three key factors:

① The intensity of Asian economic stimulus policies;

② Changes in demand in the commodity market;

③ The evolving trend of global trade conflicts.

The market is waiting to see if these 'brothers in distress' can break through the encirclement.