AUD/NZD stays depressed below 1.0800 as RBA’s Kent, Aussie-NZ data flash mixed signals
|- AUD/NZD fails to keep recovery moves from 1.0745, prints three-day losing streak.
- RBA’s Ken highlight stimulus need, Aussie PM Morrison seems worried over Papua New Guinea’s covid outbreak.
- Australia’s Westpac Leading Index eases in February versus 0.26% prior.
- Russia, North Korea and Iran are extra burdens to the risks ahead of the Fed.
AUD/NZD holds lower ground, down 0.12% intraday, while taking rounds to 1.0770-65 during the initial Asian session on Wednesday. Even so, the quote seems to struggle for a clear direction amid mixed catalysts from Australia and New Zealand.
Starting with the RBA Assistant Governor (Financial Markets) Christopher Kent. The RBA policymaker rekindled the need for strong stimulus while marking cautious optimism in his latest speech.
Read: RBA's Kent: Economic outlook, while improved, is still very uncertain
Also favoring the AUD/NZD sellers could be Australia’s Westpac Leading Index for February, 0.01% MoM versus 0.26% prior. Earlier in the day, the New Zealand Current Account balance recovered from $-2.88 B forecast and $-3.521 B previous readouts to $-2.695 B. during the Q4 2020. However, the Current Account-GDP ratio remains stable near -0.8% for the stated period.
It’s worth noting that the market sentiment sours and offers extra filters to the currently downward grind. While searching for the clues, pre-Fed caution and the geopolitical threats from Iran, North Korea and Russia could take the front seat. Also challenging the mood is are the latest comments from the US diplomat stating readiness for robust and frank talks with China during this week.
Against this backdrop, S&P 500 Futures seesaw above 3,950, mildly up, whereas the US 10-year Treasury yield catches a breather after the previous day’s recovery moves to 1.62%.
Looking forward, a light calendar in Asia should highlight the pre-Fed trading lull to keep AUD/NZD in a tight range.
Read: Federal Reserve Preview: The Good, the Bad and the Ugly edition, three critical things to watch
Technical analysis
Although a confluence of 50-day and 200-day EMA tests the AUD/NZD bears around 1.0730-25, bulls may remain skeptical unless witnessing a fresh yearly high above 1.0830.
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