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AUD/USD and NZD/USD Fundamental Daily Forecast – China Data Likely to Influence Aussie, Kiwi

James Hyerczyk

The Australian and New Zealand Dollar rose against the U.S. Dollar on Monday as fears of an escalating conflict in Syria eased, leading to increased demand for higher-yielding risk assets.

The AUD/USD settled at .7781, up 0.0022 or +0.28%. The NZD/USD finished at .7362, up 0.0010 or +0.041%.

Daily AUD/USD

The Aussie and Kiwi were also helped by comments from President Donald Trump that implied he is comfortable with further U.S. Dollar weakness.

Both currencies traded lower during the Asian session, but mounted strong rallies after the U.S. Dollar began to weaken in Europe. The AUD/USD and NZD/USD picked up momentum shortly before the U.S. opening following a tweet from Trump which accused Russia and China of “playing the Currency Devaluation game.” This suggested that Trump was comfortable with a cheaper U.S. Dollar.

In the U.S. on Monday, Retail Sales came in better-than-expected, rising 0.6% versus a 0.4% forecast. Core Retail Sales came in as expected at 0.2%.

In other news, the Empire State Manufacturing Index was 15.8, below expectations, Business Inventories stayed the same at 0.6% and the NAHB Housing Market Index was 69 versus a 71 estimate.

Daily NZD/USD

Forecast

We could be looking at a busy session for Aussie and Kiwi traders with the release of the Reserve Bank of Australia monetary policy minutes at 0130 GMT and a slew of economic data from China, starting at 0200 GMT.

I don’t expect any surprises from the RBA minutes. The minutes is expected to say that a gradual decline in the unemployment rate is expected, along with some pick up in wages and an eventual return of inflation to target. Essentially, the RBA will say that it is not in a hurry to raise rates and when it does, monetary policy will evolve gradually.

China is tentatively scheduled to release data on Q1 GDP, urban fixed asset investment, retail sales and industrial output figures for March. GDP is expected to have grown by 6.8%, unchanged from the figure reported during the last quarter of 2017. Although the GDP is the headline number, the other reports have tended to have a bigger effect on the Australian and New Zealand Dollars.

 

This article was originally posted on FX Empire

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