News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • $USDCAD, $AUDUSD Near-term Technical Setups - https://t.co/HOOdZz6IIF https://t.co/DRiqmlKXHg
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.11% Gold: -0.91% Silver: -3.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/u41nMRKgOj
  • A pretty clean break from $SPX and other risk-sensitive assets are following along. As Hans Landa said in Inglorious Basterds: "Ooooooo. That's a Bingo" https://t.co/fLqS3kL8li
  • US Dollar Index reaches a multi-month high as markets strike a risk-off tone $USD $DXY https://t.co/m8AdjHztFX
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.13%, while traders in GBP/JPY are at opposite extremes with 70.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/GgwsfrU5lz
  • EUR/USD sheds 40-pips in a matter of minutes as the US Dollar strengthens broadly. Get your $EURUSD market update from @RichDvorakFX here:https://t.co/wIlo9Tbp7A https://t.co/It5iIFhMmL
  • Well, I don't think Powell will temper interest/concern around central banks having to pullback in the foreseeable future. Both 'taper tantrum' and 'operation twist' search interest charging higher: https://t.co/NK17S328F3
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.86% FTSE 100: -1.20% France 40: -1.27% Wall Street: -2.32% US 500: -2.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/KjNr7ongtX
  • Nasdaq now down over 3% today, confirming 10% correction territory. $QQQ
  • $USDCHF has continued to strength today, now above the 0.9280 level, trading around the highs hit in late September. The pair has performed strongly since mid February as US rates have continued higher, rising from 0.8900 by nearly 400 pips to its current levels. $USD $CHF https://t.co/qrHY8Sy2sf
Australian Dollar Outlook Remains Weak vs New Zealand Dollar: RBNZ to Mull QE Taper?

Australian Dollar Outlook Remains Weak vs New Zealand Dollar: RBNZ to Mull QE Taper?

Justin McQueen, Analyst

NZD, AUD/NZD Price Analysis & News

  • NZD Tracking the Strong NZ Economy Narrative
  • RBNZ May Have to Mull Tapering

NZD Tracking the Strong NZ Economy Narrative, RBNZ May Have to Mull Tapering

Arguably one of the most dovish central banks for the majority of 2020, the RBNZ had signalled a strong possibility that they could take the OCR below zero. However, with higher than expected inflation data, a rampant housing market and a strong labour market reported last night, the RBNZ may have to start mulling a tapering of QE purchases. At the backend of last year (November), the RBNZ had been somewhat caught out by surging house prices and thus pushed back against taking rates negative, which subsequently led to a significant re-pricing of NIRP in the rates curve. Now with the NZ economy making a strong comeback, money markets are expecting the OCR to be left unchanged for the foreseeable future.

NZD/USD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -10% 4% -2%
Weekly 27% -11% 1%
What does it mean for price action?
Get My Guide

Overnight, the latest jobs report showed that the unemployment rate for Q4 fell to 4.9% from 5.3%, which is significantly lower than what the RBNZ had forecast at 5.6%. This also comes after the RBNZ underestimated Q4 CPI, which printed at 0.3ppts above the central bank’s forecast. In turn, local banks have pushed back against expectations of further easing, while the BNZ now expect a rate hike in 2022. That said, the outlook for the Kiwi is likely to remain firm in the run-up to the RBNZ meeting, particularly against the Aussie, given that the RBA has recently extended its QE program earlier than many had expected with Governor Lowe continuing to talk down the AUD. As I mentioned a couple of weeks ago, AUD/NZD had been trading at rich levels relative to 10yr spreads.

AUD/NZD Remains Tilted to the Downside

Australian Dollar Outlook Remains Weak vs New Zealand Dollar: RBNZ to Mull QE Taper?

Source: Refinitiv

Hawkish vs Dovish: How Monetary Policy Affects FX Trading

AUD/NZD Technical Overview

On the technical front, AUD/NZD dropped towards key support levels at 1.0561 (Jul 2020 low), however, fell short of testing the 50% Fibonacci retracement at 1.0519, which also coincides with the uptrend stemming from March 2020. Given the sizeable fall in recent sessions, there is the possibility of some reprieve, however, 1.0643 (38.2% Fib) is likely to cap gains ahead of the RBNZ meeting. Among the risks for the NZD at present would be any jawboning from RBNZ speakers, who are likely to voice their concerns over the appreciation in the currency, given that the TWI is above the central bank’s forecast by quite some margin. Although, jawboning the currency would likely spark a short-term reaction, given that the central bank is unlikely to ease further.

AUD/NZD Chart: Daily Time Frame

Australian Dollar Outlook Remains Weak vs New Zealand Dollar: RBNZ to Mull QE Taper?

Source: Refinitiv

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES