Skip to main content
Home
  • English
  • العربية
  • SUPPORT
  • Log in
  • JOIN EXINITY
  • Markets
    • Markets

    Explore global financial markets

    Individual stocks
    • Stocks
    • Stock CFDs
    Forex and commodities
    • Forex pairs
    • Commodities
    Indices
    • Indices
    • Currency indices
  • Ways to trade
    • Ways to trade

    Explore our services at a glance

    • Exinity World

    Get pure investing simplicity and build a global portfolio from just $20

    • Exinity Trader

    Been trading for a while?
    Say hello to Trader

    • Exinity Trader Pro

    Pro, meet pro.
    The service for experienced traders

  • Edge
    Edge

    The markets are full of opportunity, but you won’t find it by accident. Edge puts useful and jargon-free insight at your fingertips.

    Edge library
    • Understanding the markets
    • Analysis and forecasting
    • Understanding risk and returns
    • Learning from experience
    Trading ideas
    • What our experts say
    • Meet our experts
  • About

What our experts say

Week Ahead: Can NZD, AUD extend August gains vs USD?

Han Tan
Chief Market Analyst
13.08 @ 16:14 GMT
Han Tan

Besides the US Dollar, the antipodean currencies will also be vying for the limelight in the coming week the. This is due to key events such as the RBNZ policy decision, the RBA meeting minutes, and the Australian employment data, all due in the coming days alongside these other potential market-moving events:

Monday, August 16

  • Japan industrial production, GDP
  • China industrial output, retail sales

Tuesday, August 17

  • Reserve Bank of Australia policy meeting minutes
  • Eurozone GDP
  • US retail sales, industrial production
  • Fed Chair Jerome Powell speech

Wednesday, August 18

  • RBNZ policy decision
  • EIA crude oil inventory report
  • FOMC minutes
  • Dallas Fed President Robert Kaplan speaks

Thursday, August 19

  • Australia unemployment rate
  • US weekly jobless claims

Friday, August 20

  • Japan CPI
  • China loan prime rate
  • UK consumer confidence, retail sales
  • Canada retail sales

 

Note that NZD and AUD are leading G10 currencies that can currently boast month-to-date gains against the UD dollar.

 

Hawkish RBNZ to fuel more NZD gains?

The Kiwi has been fueled by rising expectations that the Reserve Bank of New Zealand is set to hike its interest rates. Markets are already betting on 3 rate hikes by February 2022, thanks to rising inflation and a robust jobs market. The July unemployment rate by 0.7 percentage points down to 4%, far better than the market-estimated 4.4%. The 2Q CPI came in at 3.3%, breaching the RBNZ’s target range of 1-3%.

The increasingly hawkish RBNZ has served as a tailwind for the Kiwi as it posted a month-to-date advance against all of its G10 peers. NZDUSD was also pushed into testing its upper Bollinger band in several sessions so far in August.

Should a rate hike indeed materialize over the coming week, that should help solidify NZDUSD’s presence above the psychologically-important 0.70 mark.

 

Jobs data to heap more pressure on AUD?

Recall that at the Reserve Bank of Australia’s August meeting, policymakers surprised markets by sticking to their tapering plans despite the ongoing lockdowns across the nation. Despite such hawkish overtones, markets are cognizant of the downside risks stemming from measures to curb the Delta variant’s spread.

Against such a backdrop, Australia’s economic calendar in the week ahead is set to show 46.2k jobs lost in July, with the unemployment rate ticking up higher to 5% from 4.9% in June. It remains to be seen how the RBA takes these data points into account at its 7 September meeting, and whether it can still afford to stick to its tapering plans.

In the meantime, as long as the virus-curbing measures stay in place, it could keep AUDUSD within its downtrend and prone to more downside. Having already formed a death cross, AUDUSD could even set a new year-to-date low in sub-0.73 domain.

 

AUDNZD may best capture widening Australia-New Zealand gap

The potential policy divergence between the RBA and the RBNZ is perhaps best encapsulated in AUDNZD as opposed to stacking either currency against the US dollar. After all, the heightened expectations for the US Federal Reserve to taper its asset purchases sooner rather than later is strengthening the bullish case for the US dollar.

If the Australian economy is shown to be faring worse-than-expected relative to its neighbour down south past the Tasman Sea, that is likely to better manifest in more downside for AUDNZD. This currency pair has already been flirting with oversold conditions in recent sessions, though the December low may still loom closer if the economic and policy gap widens between Australia and New Zealand.

Disclaimer: This material is comprised of personal opinions and ideas. It should not be construed as an investment recommendation or a solicitation for any transaction. It does not imply any obligation to purchase investment services, nor does it guarantee or predict future performance. Exinity, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Ready to jump into the markets?

Choose your Exinity experience and create your account in minutes

JOIN EXINITY
  •  
  •  
  •  
  •  
Home
  • About us
    • Exinity Group
    • Careers
    • Company news
    • Meet our experts
  • Useful links
    • Trading platforms
    • Trading tools
    • Trading hours
  • Support
    • FAQ
    • Contact us

The services on the Website are provided by Exinity Limited (exinity.com), regulated and licensed by the Financial Services Commission of the republic of Mauritius with an Investment Dealer License bearing license number C113012295.

Card transactions are processed via Exinity Services Limited (EU merchant company), a company incorporated in the Republic of Cyprus with company number ΗΕ 400404, registered office at 64 Agiou Georgiou Makri, Anna Maria Lena Court, Office 201, 6037, Larnaca, Cyprus and regulated by the laws of Cyprus. Address for cardholder correspondence: [email protected] Business location address: 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus.

Exinity ME Ltd is registered under the Laws of the Abu Dhabi Global Market (“ADGM”), with registered offices at 16-104, 16 Floor, Al Khatem Tower, ADGM Square, Al Maryah Island, Abu Dhabi, UAE. It is regulated by the Financial Services Regulatory Authority (“FSRA”), Financial Services Permission Number 200015 and is a duly licensed Category 3A Firm authorized to provide financial products and services to persons who meet the qualifying criteria of a Professional Client as defined by the FSRA rules.

Risk Warning: Trading Forex and Leveraged Financial Instruments involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Trading non-leveraged products such as stocks also involves risk as the value of a stock can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the Exinity brand based on the legal requirements in his/her country of residence. Please read Exinity’s full Risk Disclosure.

Regional restrictions: The Exinity brand does not provide services to residents of the USA, Japan, Canada, Mauritius, Haiti, Hong Kong, Suriname, the Democratic People's Republic of Korea, Puerto Rico, Cuba, Quebec, Syria, Iran, Iraq and the Occupied Area of Cyprus.

© 2021 Exinity

Terms and agreements   |   Privacy   |   Cookies