AUD/USD and NZD/USD Fundamental Daily Forecast – Kiwi Pressured Ahead of RBNZ Decisions

The NZD/USD is under pressure because the Reserve Bank of New Zealand is expected to leave interest rates unchanged at its policy meeting on Wednesday, but may adopt a more dovish tone and cut growth forecasts.
James Hyerczyk
AUD/USD and NZD/USD

The Australian and New Zealand Dollars are trading mixed on Tuesday with the Aussie posting a small gain and the Kiwi a slight loss. The Australian Dollar opened slightly better on the back of a better-than-expected NAB Business Confidence report, but fell to its low for the session following the release of a worse-than-expected Home Loans report. In New Zealand, the Inflation Expectations report came in unchanged at 2.0%. However, trading was light ahead of the Reserve Bank of New Zealand’s interest rate and monetary policy decisions on Wednesday.

At 07:42 GMT, the AUD/USD is trading .7079, up 0.0018 or +0.23% and the NZD/USD is trading .6730, down 0.0002 or -0.03%.

NAB Business Confidence Report

The good news for the Australian Dollar earlier today was the NAB Business Confidence report. The NAB Survey showed that Australian business conditions rebounded in January, reducing the risk of a pronounced slowdown in hiring and investment in the months ahead.

According to the National Australia Bank’s (NAB) monthly business survey, the conditions index rose 4 points to +7, partially recovering after having fallen by the most since the GFC in December. “Conditions rebounded somewhat after the sharp decline last month,” said Alan Oster, Chief Economist at the NAB.

“We had noted that seasonality and statistical volatility may have driven some of the result but that the trend in conditions had been down.”

“The January survey confirms this, and while we don’t think activity in the business sector has crashed, we think that there has been some loss in momentum.”

Aussie Home Loans Sink

The total number of home loans issued in Australia was down a seasonally adjusted 6.1 percent on month in December, the Australian Bureau of Statistics said on Tuesday. That was lower than expectations for a drop of 2.0 percent following the 0.9 percent contraction November. The value of loans sank 5.3 percent on month, also missing expectations for a decline of 3.3 percent following the 1.4 percent fall in the previous month.

Daily Forecast

The AUD/USD is getting some support early Tuesday because of improved risk sentiment due to reports of a possible deal between Republicans and Democrats to avoid a government shutdown starting Saturday. However, gains are being limited by last week’s dovish remarks from Reserve Bank Governor Philip Lowe. Technically, oversold conditions could also be underpinning prices.

The NZD/USD is under pressure because the Reserve Bank of New Zealand is expected to leave interest rates unchanged at its policy meeting on Wednesday, but may adopt a more dovish tone and cut growth forecasts.

Please let us know what you think in the comments below. 

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US