AUD/NZD remains poised to decline below 1.0760 despite upbeat employment data, strong NZD data
- AUD/NZD is under selling pressure on Thursday.
- RBA's dovish stance weighs on the Australian dollar.
- Kiwi gains on upbeat GDP data.
The AUD/NZD cross-currency pair accumulates substantial losses on Thursday in the Asian session. The pair has been in continuous downside momentum since the previous four sessions, after making a high at 1.0816.
At the time of writing, AUD/NZD trades at 1.0760, down 0.27% for the day.
The combination of factors weighing the performance of the Australian dollar against its counterpart.
The Reserve bank of Australia's (RBA) June policy Minutes of Meeting revealed that the economy expanded rapidly than anticipated earlier. However, the central bank maintained its stance on keeping interest rate lower at record low levels until 2024.
Meanwhile, the RBA Governor Phil Lowe warned of the upward wage pressure if the border remained closed for another year. The policymakers further said it would be premature to consider the end of the bond buying program. This, in turn, sour the sentiment surrounding the aussie.
The growing tensions between Australia and China remain another negative factor for AUD’s performance. In the latest development, the Australian Prime Minister, Scott Morrison while speaking at the Organisation for Economic Cooperation Development( OECD), lashed out at China for undermining the rule of law and threatening free world order.
Australia’s Westpac-Melbourne Institute Leading Economic Index fell 0.6% in May after 0.2% gains in the previous month.
The Unemployment Rate fell to 5.10% in May from 5.50% in the previous month. Full-Time Employment increased by 97.5K In May. The Labor Force Participation rate jumped 66.2% in May from 66% in the previous month. The readings provide some cushion to the lower levels for the aussie.
On the other hand, the Kiwi remained in high spirits after, Australia and New Zealand Banking Group( ANZ) forecasted that the Reserve Bank of New Zealand (RBNZ) would raise the Official Cash Rate (OCR) as soon as in February 2022 than earlier forecasted in August 2022.
The projection followed the strong Gross Domestic Product (GDP) data which came at 1.6% in Q1 in March, much above the market expectations at 0.5%.
The growth differential between the two countries turns in favor of the Kiwi for the time being.
AUD/NZD additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
