AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie, Kiwi Traders Eyeing US Consumer Inflation Data

The Australian and New Zealand Dollars are edging lower on Tuesday as traders await the release of U.S. consumer inflation data that should impact U.S. Government bond yields. Investors are also reacting to China’s March exports report that missed expectations and the jump in China imports. Domestic data and a solid sale of new Aussie government bonds are also influencing the price action early in the session.

At 08:09 GMT, the AUD/USD is trading .7611, down 0.0012 or -0.16% and the NZD/USD is at .7023, down 0.0006 or -0.09%.

China’s Exports Missed Forecast in March, while Imports Rose More than Expected

China on Tuesday reported March exports data that missed analyst forecasts while imports for the month rose more than expected.

Chinese exports last month jumped 30.6% from a year ago in U.S. Dollar terms, lagging the 35.5% increase that analysts polled by Reuters had expected. Meanwhile, the country’s imports in U.S. Dollar terms rose 38.1% in March from a year ago, exceeding the 23.3% increase those analysts had forecast.

The stronger-than-expected rise in imports led China’s trade surplus to shrink to $13.8 billion in March, much narrower than the Reuters poll’s forecast of $52.05 billion.

The Aussie found only fleeting support from the Chinese trade data, but the import news should be considered a positive given China is the Australia’s biggest export market.

Australian Business Conditions Surge to Record in March:  Survey

A measure of Australian business confidence surged to its highest on record in March as firms reported sharply increased sales, profits and employment, another sign of the country’s rapid recovery from the coronavirus pandemic recession.

National Australia Bank’s (NAB) index of business conditions jumped 8 points to +25 in March, with strength reported across most sectors and regions.

The survey’s measure of confidence eased 3 points, but was still relatively upbeat at +15.

“Businesses are telling us activity continues to increase at a very healthy rate as we have moved past the rebound phase in activity with the earlier removal of pandemic-related restrictions,” said NAB chief economist Alan Oster.

“Overall, the recovery over the last year has been much more rapid than anyone could have forecast.”

New Zealand Business Outlook Remains Pessimistic in Q1:  NZIER Business Confidence Report

New Zealand’s actual business confidence figures declined in the first quarter of the year although other parameters improved, suggesting a continued recovery in sentiment, a private think tank said on Tuesday.

A net 13% of firms surveyed expected general business conditions to deteriorate compared with 6% in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed.

Daily Forecast

The Aussie and Kiwi are drifting lower ahead of the release of a key U.S. inflation report. The March reading for the consumer price index is set to come out at 12:30 GMT. Economists polled by Dow Jones are projecting the headline index to rise by 0.5% month-over-month and 2.5% year-over-year.

Traders will be reacting to the move in Treasury yields which have jumped from just below 1% since the end of January, over fears of inflation rising as the U.S. economy recovers from the coronavirus pandemic.

A rise in yields could make the U.S. Dollar a more attractive investment, pressuring the Aussie and Kiwi, however, gains could be limited with some investors already pricing in an increase.

For a look at all of today’s economic events, check out our economic calendar.