AUD/USD and NZD/USD Fundamental Daily Forecast – NZD Surges on Bank Capitalization Plans, AUD Pressured by Weak Retail, Trade Balance Data

The Australian Dollar is trading lower after retail sales came in flat and the Trade Balance came in weaker than forecast. The New Zealand Dollar is surging early Thursday on the back of positive comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr.
James Hyerczyk
AUD/USD and NZD/USD

The New Zealand and Australian Dollars finished mixed on Wednesday with the Kiwi posting a gain and the Aussie closing unchanged. Both currencies posted two-sided price action before rallying late in the session.

Early in the session the Kiwi and Aussie were pressured by doubts that the U.S. and China would be able to pull-off a trade deal before the 2020 U.S. Presidential Elections. That line of thought was feed by President Trump’s comments on Tuesday.

The currencies began to claw back those earlier losses after a report suggesting progress on the U.S.-China negotiations rekindled risk appetite. Bloomberg reported that Washington and Beijing are moving closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal.

The Kiwi and Aussie were also supported by weaker-than-expected U.S. private-sector jobs data on Wednesday and a soft services report that fueled worries about a slowdown in the world’s largest economy.

Weak U.S. Economic Data Supportive

The ADP National Employment Report showed U.S. private-sector hiring in November unexpectedly slowed to its weakest pace in six months, as goods producers and construction companies cut jobs. The median forecast among economists polled by Reuters called for a gain of 140,000 jobs.

Following the soft payrolls report, data showed that the U.S. services sector slowed in November, with the Institute for Supply Management’s non-manufacturing index falling 53.9 in November from 54.7 the previous month. The weaker-than-expected U.S. services report came after poor U.S. manufacturing data earlier this week.

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Daily Forecast

The Australian Dollar is trading lower after retail sales came in flat and the Trade Balance came in weaker than forecast.

At 00:43 GMT, the AUD/USD is trading .6836, down 0.0012 or -0.18%.

The Retail Sales report released by the Australian Bureau of Statistics came in at 0% versus a 0.3% forecast and 0.2% previous read.

The Trade Balance for October came in at 4502 M versus 6100 M estimated and 7180 M previously reported.

Imports for October were 0% versus the previously reported 3%. Exports for October were -5% versus the previously reported 3%.

The New Zealand Dollar is surging early Thursday on the back of positive comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr.

The RBNZ announced it would go ahead with plans to increase capital requirements for banks, but offered more time for the lenders to make the changes than originally proposed.

Given the surge in Kiwi prices, traders apparently liked the news despite the negative implications for the Gross Domestic Product.

At 00:54 GMT, the NZD/USD is trading .6550, up 0.0021 or +0.32%.

Traders will also be monitoring the latest U.S.-China trade talk developments on Thursday as well as U.S. reports on Challenger Job Cuts, Trade Balance, Weekly Unemployment Claims and Factory Orders.

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