AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Traders Bracing for Gloomy Labor Market Data

The Australian and New Zealand Dollars are edging lower early Thursday as concerns over the global economic recovery encouraged investors to seek safety in the greenback. The Aussie and Kiwi were steady at the start on Wednesday after the Reserve Bank of New Zealand (RBNZ) decided to leave its Official Cash Rate (OCR) unchanged, but a wave of risk aversion swept through the markets after the Federal Reserve released the minutes from its July meeting.

At 01:04 GMT, the AUD/USD is trading .7215, down 0.0022 or -0.30% and the NZD/USD is at .6853, down 0.0028 or -0.40%.

Fed Minutes Recap

Federal Reserve officials felt their employment benchmark for decreasing support for the economy “could be reached this year,” but appeared to disagree on other key aspects of where monetary policy should turn next in the transition from the pandemic crisis, according to minutes from last month’s policy meeting.

RBNZ Recap

The RBNZ delayed raising rates on Wednesday as policymakers quickly shifted gears after the country was put into a snap COVID-19 lockdown over a handful of new cases, but the bank still expects a hike before year-end.

The Reserve Bank of New Zealand (RBNZ) held the official cash rate at a record low of 0.25% despite the economy running red-hot and a majority of analysts polled by Reuters last week expecting a hike.

RBA Recap

Australia’s central bank (RBA) would be prepared to take policy action should coronavirus lockdowns across the country threaten a deeper economic setback, minutes from its August meeting showed on Tuesday.

That outcome now looks ever more likely as the Delta variant spreads, piling pressure on the Reserve Bank of Australia (RBA) to delay a planned tapering of its bond buying program, or even to ease.

Daily Forecast

At 01:30 GMT, Australia will release its Employment Change and Unemployment Rate reports. Both are expected to show dismal results because of the lockdowns in major cities.

The Employment Change is expected to show the economy lost 42.5K jobs in July. The Unemployment Rate is expected to rise to 5.0% from 4.9% the month before.

The numbers have already been priced into the Australian Dollar so most of the price action today will be determined by risk sentiment and U.S. economic data including the Weekly Unemployment Claims report.