Longer-term, the Australian and New Zealand Dollars are bearish because of the divergence in monetary policies between the hawkish U.S. Federal Reserve and the dovish Reserve Bank of Australia and the dovish Reserve Bank of New Zealand. The short-term rally we are experiencing is likely being fueled by traders adjusting positions on concerns a prolonged trade war between the United States and China may force the Fed to alter its plans for as many as two more rate hikes later this year.
AUD/USD Daily Forecast - 17 July
- Tuesday, Jul 17 2018
The Australian and New Zealand Dollars are trading slightly higher early Monday as investors await the release of a slew of economic data from China. The data includes reports on Gross Domestic Product, Fixed Asset Investment, Industrial Production, Retail Sales and the Unemployment Rate. There will also be a NBS Press Conference. The reports are expected to be released at 0200 GMT. At 0130 GMT, the AUD/USD is trading .7427, up 0.0002 or +0.04% and the NZD/USD is at .6772, up 0.0005 or +0.09%. Increased demand for higher risk assets are helping to underpin the Aussie and Kiwi, however, firmer U.S. Treasury yields may be capping gains.