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AUD/NZD – Will The Drop Continue?
In Asia this week, both New Zealand and Australia have important economic news on the docket. Australia has employment reports and New Zealand has its GDP numbers scheduled for release. NZ GDP is expected to be strong thanks to the improvement in trade activity. Australian employment, on the other hand, could soften with the manufacturing and service sectors reporting job losses.
The AUD/NZD pair is already in a major downtrend as the interest-rate differential between the two economies continues to widen.If the Australian employment data proves weaker than expected, the Reserve Bank of Australia may be forced to reconsider its neutral stance, and markets will begin to price in another rate cut. A decline could take AUD/NZD to 1.0300 with parity the ultimate target while 107.00 caps the upside.