AUD/NZD is projected to dip below 1.1170 as market players focus on the RBA rate decision

The AUD/NZD exchange rate has shown less conviction in its recent slide after printing a new four-day low below 1.1700. The cross dropped sharply on Tuesday after breaking below the crucial support level of 1.1200. It is expected that the asset will continue to drop after breaking through its immediate support at 1.1170, as investors remain cautious ahead of the Reserve Bank of Australia's interest rate decision (RBA).

The Aussie Bulls fell on Tuesday after poor data on Australian Building Permits was made public. As expected, the latest economic data showed a drop to -25.9%, from the prior report's -17.2%. The monthly numbers also fell drastically, from -0.6% to -17.2%.

Interest rates are expected to be raised by the Reserve Bank of Australia (RBA) for the fourth time in a row on Tuesday. So far, the Australian economy has not breathed a sigh of relief as a result of falling pricing pressures. Inflation as measured by the Consumer Price Index (CPI) in Australia is at 6.1% as of the second quarter, and it is quite expected that additional rate hikes will be necessary to bring it down. Furthermore, the Official Cash Rate (OCR) information from RBZ Governor Philip Lowe will be essential.

New Zealand kiwi bulls have been supported by upbeat Building Permits data. This latest economic report shows a significant improvement, with a reading of 5% compared to -2.2% in the prior report. For the market as a whole, investors are still picking themselves up from the Reserve Bank of New Zealand's (RBNZ) announcement of two more interest rate hikes for the remainder of the year. In reaction to the soaring inflation, Reserve Bank of New Zealand governor Adrian Orr said last week at the Jackson Hole Economic Symposium that the central bank will announce a couple more interest rate increases.