AUD/NZD sees a downside to near 1.1120 on downbeat Aussie PMI
- AUD/NZD is likely to slip lower to 1.1120 amid poor Aussie PMI data.
- The Manufacturing PMI landed at 54.4 while the Services PMI was released at 49.6.
- Going forward, investors will focus on the NZ Retail Sales data.
The AUD/NZD pair faces barricades around 1.1140 in the Asian session. After printing a three-week high of 1.1151 last week, the asset is displaying exhaustion. The cross is expected to show a sheer downside after violating the immediate support of 1.1130 as the IHS Markit has reported a downbeat Aussie Purchase Managers Index (PMI) data.
The S&P Global Manufacturing PMI slipped to 54.5 from the expectations of 57.3 and the prior release of 55.7. While the Services PMI data landed lower to 49.6 against the estimates of 54 and the former release of 50.9. The downbeat PMI data has weakened the aussie bulls. No doubt, the poor PMI data could be the consequence of the rising Official Cash Rate (OCR) by the Reserve Bank of Australia.
In order to tame the soaring price pressures, RBA Governor Philip Lowe has already raised the OCR to 1.85% by announcing three 50 basis points (bps) rate hikes consecutively. The sudden unavailability of cheap money in the aussie zone has trimmed the overall economic activities.
On the kiwi front, investors are awaiting the release of the NZ Retail Sales, due on Wednesday. The economic data was recorded at -0.5% for the first quarter of CY2022. Considering the soaring price pressures, the economic data should land higher as payouts for households have increased tremendously. In case of a decline in the economic data, investors will prefer to dump the kiwi dollar due to a slowdown in the overall demands.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
