Aussie Gains Versus the Kiwi but Rate Decision Will Drive

The Aussie Dollar was lower against the Kiwi on Monday but the Reserve Bank of New Zealand will decide on interest rates on Wednesday and this will drive the pair in the days ahead.

The RBNZ is expected to hold rates steady at the latest meeting and this would have been confirmed by last week’s GDP release which showed a better than expected growth figure for the Kiwi economy. GDP dropped 12.2% q-on-q, which is the largest quarterly fall on record. The figure was still slightly better than the 12.8% decline that analysts expected.

The Australian and New Zealand economies both have rates locked at 0.25% and traders are watching the economic data closely. Australian unemployment sits at 6.8%, while the NZ figure is 1.5% , The Kiwi inflation is also 1.5% while Australia’s is in deflation territory. This dynamic will likely support the NZ dollar and if the bank holds rates steady then the currency may remain bid. 

Air New Zealand CEO Greg Foran has ruled out a trans-Tasman flight bubble between the two nations until at least March 2021 and the news dashes hope that there would be a return to travel between the two Australasian nations any time soon.

AUDNZD Technical Outlook

AUDNZD was 0.33% higher on the day but the price is retesting the 50-day moving average and still has the potential for further losses. A close above the moving average would be a positive and a close below 1.0800 would likely lead to a bear trend. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.    

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AUDNZD Daily Chart

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