AUD/NZD seeks out lower levels as Kiwi remains best performing G10
|- AUD/NZD bears taking full charge as price melts below resistance structures.
- The market will look ahead to the RBNZ, unfazed by GDP beat.
AUD/NZD has created lower lows as the kiwi continues its plight to fly high above its counterparts.
At the time of writing, AUD/NZD is trading at 1.0848, flat on the session so far in a 1.0832 and 1.0852 range.
The latest event came with the New Zealand Gross Domestic Produce data which beat expectations which fell a seasonally adjusted 12.2 percent in the second quarter, data showed on Thursday.
Key notes
- GDP prod based (QoQ) sa (Q2): -12.2% (est -12.8%, prev -1.6%).
- GDP prod based (YoY) sa (Q2): -12.4% (est -13.3%, prev -0.2%).
- Annual average prod-based GDP -2.0 pct in second Q vs year ago (Reuters poll -2.3 pct).
- Q2 s/adj expenditure-based GDP -9.8 pct on pvs quarter (Reuters poll -13.0 pct).
The bird was unfazed by this though and while it was a beat, the data is backwards looking and is hardly going to draw a call to action by the central bank.
The downside in the economy is priced in.
The Reserve Bank of New Zealand is coming up in the MPR next week and analysts at TD Securities explained that the central bank's “least regrets” strategy will not change.
The Committee is likely to emphasise that preparations to deploy a negative OCR and Funding for Lending Programme are well underway; they could also flex tactical LSAP purchases to get more traction on the NZGB curve,
analysts at ANZ bank explained.
AUD/NZD levels
From a technical perspective, the cross is melting to the downside, in line with the following projections in the trade setup and articles that have since been updated since the start of the week:
Updated to risk-free
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