AUD/USD and NZD/USD Fundamental Daily Forecast – Forex Pairs Retreat after Upbeat China GDP

Despite upbeat reports from China earlier in the session, the Australian and New Zealand Dollars are retreating. Perhaps this is an indication of overbought technical conditions or the start of position-squaring ahead of Tuesday’s quarterly consumer inflation data from New Zealand and the minutes of the Reserve Bank of Australia’s monetary policy meeting.

At 0651 GMT, the AUD/USD is trading .7805, down 0.0020 or -0.26% and the NZD/USD is at .7325, down 0.0021 or -0.28%.

Earlier today, China reported 6.9 percent growth year-over-year for the second quarter, beating the 6.8 percent forecast. The increase was fueled by strong consumer spending, factory output and investment.

China also reported January to June fixed asset investment rising 8.6 percent on year while property investment rose 8.5 percent in the same period.

Retail Sales were also higher, rising 11.0 percent in June from a year ago. This was also better than the 10.6 percent forecast.

Forecast

Later today, investors will get the opportunity to react to the U.S. Empire State Manufacturing Index. It is expected to come in at 15.2, below the previously reported 19.8.

Late Monday/early Tuesday, New Zealand will release its latest quarterly CPI report. It is expected to show consumer inflation rose 0.2%, down 1.0%. A stronger-than-expected number will force the Reserve Bank of New Zealand to consider lifting interest rates sooner-than-expected.

The RBA will release its latest minutes from its July monetary policy meeting. Investors will learn how the central bank feels about rising global interest rates and how this effects their decision to maintain a neutral stance. We may also find out if the central bank is concerned about the rapidly rising Australian Dollar and what the central bank plans to do to stop its assent if the lofty price levels are seen as detrimental to the economy.