A weaker NZD against a stronger AUD? [Video]

Giles Coghlan LLB, Lth, MA Financial Source

Listen to the latest market mood for the AUDNZD pair.

AUD strength

Australia's employment change data showed some encouraging signs for Australia's job market. July's data showed an addition of 114.7k jobs and 43.5K of these were full time The unemployment rate also came in lower at 7.5% vs the 7.8% expected.

NZD weakness

Building on the RBNZ's dovish picture yesterday deputy Governor Bascand said that the resurgence of the virus in New Zealand is a big risk. He said that the RBNZ will probably combine negative rates with funding for lending programmes if more stimulus is needed beyond yesterday's $40 billion QE extension.

This should mean a weaker NZD against a stronger AUD for today's session. Therefore expect buyers on pullbacks on the AUDNZD pair. We expect this trade to play out between now and the next 3-4 days.

Trade Risks: If we see any very negative US-China news that will weigh more heavily on the AUD than the NZD and will invalidate this outlook.

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Author

Giles Coghlan LLB, Lth, MA

Financial Source

Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.

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