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AUD/NZD – Back to 1.0500?
The recent bounce in AUD/NZD pair looks to have run its course and the pair may be back on its way to test recent especially if the AU employment figures due out tomorrow disappoint the market. The Aussie has been getting some lift over the past few week or so from mildly hawkish RBA statements as the central bank essentially told the market that it will remain on hold for the foreseeable future.
However such hawkish posture from Mr. Stevens and company is contingent upon AU economy staying out of recession. If the jobs data shows a sudden drop in labor demand, fears about a recession will likely put enormous pressure on the RBA and make it reconsider the possibility of December rate cut.
Meanwhile in New Zealand today RBNZ Financial Stability Report is likely to point out the troubling credit conditions in the housing market which could keep RBNZ at bay on any further easing for the time being. With the pair making lower highs for the past four days AUD/NZD looks ripe to fall and test the 1.0500 level.