AUD/USD and NZD/USD Fundamental Weekly Forecast – Traders Betting Aussie Wildfires to Hurt Currency

For much of last week, speculators were increasingly betting that bushfires will hurt Australia’s economy. The damage is likely to run into the billions with spending and tourism expected to take a hit.
James Hyerczyk

Lower demand for risky assets weighed on the Australian and New Zealand Dollars early last week with investors apparently already moving on from the optimism of the U.S.-China trade deal announcement on December 13. Concerns that the wild fires in the Australian bush lands would hurt the economy and lead to another rate cut by the Reserve Bank of Australia also weighed on prices.

Last week, the AUD/USD settled at .6900, down 0.0045 or -0.65% and the NZD/USD finished at .6635, down 0.0028 or -0.42%.

There were no major economic releases out of New Zealand last week. In Australia, Building Approvals came in higher than expected. The Trade Balance and Retail Sales were also better than the estimates.

Both the Aussie and the Kiwi were boosted by a disappointing U.S. jobs report on Friday.

Australian Economic News

The number of dwellings approved in Australia increased by 11.8 percent month-over-month in November 2019, easily beating market expectations of a 2 percent gain and after a revised 7.9 percent fall in the previous month.

Australia’s trade surplus widened to AUD 5.80 billion in November 2019 from a downwardly revised AUD 4.08 billion in the previous month and above market consensus of AUD 4.15 billion. Exports rose 2 percent while imports dropped 3 percent.

Considering the first eleven months of the year, trade surplus surged to AUD 63.26 billion from AUD 19.21 billion in the corresponding period of the prior year.

Retail Sales in Australia rose by 0.9 percent month-over-month in November 2019, easily beating market forecasts of 0.4 percent and after an upwardly revised 0.1 percent gain in the previous month.

This marked the steepest increase in retail trade since November 2017, lifted by Black Friday sales.

Retail Sales MoM in Australia averaged 0.47 percent from 1982 until 2019, reaching an all-time high of 8.10 percent in June of 2000 and a record low of -10.60 percent in July of 2000.

Weekly Forecast

This week’s major reports include New Zealand’s NZIER Business Confidence and China’s quarterly GDP. In the U.S., investors will get the opportunity to react to the latest data on Consumer Inflation and Retail Sales.

For much of last week, speculators were increasingly betting that bushfires will hurt Australia’s economy. The damage is likely to run into the billions with spending and tourism expected to take a hit.

Traders were betting the fires would spur the Reserve Bank of Australia (RBA) to cut interest rates to support already sluggish growth.

The fires are the wildcard this week that could drive the Australian Dollar lower.

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
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.
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.