Following the RBNZ rate cut earlier, NAB's senior FX strategist, Rodrigo Catril, says that the AUD is "certainly getting a bit of an unwelcome NZD infection". Adding that the "more aggressive, proactive RBNZ certainly ups the pressure on the RBA to do more".

However, the firm still sees the RBA only cutting rates by 25 bps again in November; arguing that "the RBA has its own approach based on its own outlook of domestic and global drivers, so the RBNZ cutting aggressively doesn't mean the RBA will follow".

That said, they still see a move downwards in AUD/USD as being "the path of least resistance" although the pair is unlikely to breach below 0.6550 "imminently".