AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Weakens as Officials Cut Q1 Growth Outlook

The Australian and New Zealand Dollars are trading mixed on Thursday with the Aussie under pressure and the Kiwi being underpinned. Economic data and a rate cut by its central bank earlier in the week may be behind the pressure on the Australian Dollar. Meanwhile, New Zealand’s central bank has been noticeably quiet about cutting rates although it is widely expected to do so later in the month.

At 11:29 GMT, the AUD/USD is trading .6620, down 0.0006 or -0.08% and the NZD/USD is at .6324, up 0.0026 or +0.41%.

Australian News

Earlier in the session, Australia’s Treasury Department said estimates show the coronavirus will detract at least half a percentage point off growth in the first quarter of 2020, but says it is too early to make a longer-term assessment of the impact of the virus.

Additionally, Australia’s January balance of goods and services came in slightly bullish. The trade balance came in at 5.21 billion A$ versus a forecast of 4.80 billion A$. This was down from the previously release which was reversed higher to 5.38 billion A$.

Australia’s January goods and services exports dropped 3 percent month-over-month on a seasonally adjusted basis and January imports fell 3 percent month-over-month on a seasonally adjusted basis.

The Australian Dollar showed limited reaction to the slightly stronger trade balance data.

New Zealand News

There was nothing new on the data front nor any positive developments over the coronavirus outbreak on Thursday so we have to chalk up today’s strength in the Kiwi to technical factors. Today’s strength could be traders setting up the next shorting opportunity.

At this time, traders are saying the 50-basis point rate cut by the U.S. Federal Reserve is putting more pressure on the Reserve Bank of New Zealand (RBNZ) to cut its official cash rate at its March 25 monetary policy meeting.

ASB Bank had penciled in a 25 basis point cut for the March meeting, “but given run of information and central bank action, we certainly wouldn’t want to rule out a larger 50 bps cut.”

All the main commercial banks now expect a cut of at least 25 basis points, come March 25.