Yahoo Finance AUD/USD and NZD/USD Fundamental Daily Forecast – Traders Positioning Ahead of Key U.S. Consumer Inflation Data
The Australian and New Zealand Dollars finished mixed on Monday as investors positioned themselves ahead of major geopolitical and central bank events this week.
The AUD/USD settled at .7611, up 0.0013 or +0.17% and the NZD/USD finished at .7024, down 0.0006 or -0.08%.
On tap early Tuesday is the summit between U.S. President Donald Trump and North Korean leader Kim Jong-un. Whether it will move the financial markets is debatable.
Both the Aussie and Kiwi may have been supported by demand for risky assets. U.S. stocks rose as investors shrugged off the events at last week-end’s G-7 meeting, instead choosing to focus on the meeting between President Trump and North Korean leader Kim Jong-un.
U.S. Treasury yields rose on Monday as investors moved past the events at the G-7 meeting and on to the CPI data scheduled for Tuesday and Wednesday’s Fed announcements. The yield on the benchmark 10-year Treasury note settled at 2.966, while the yield on the 30-year Treasury bond was higher at 3.108 percent. The widening of the interest rate differential between U.S. Government Bonds and Australian Government Bonds may have made the U.S. Dollar a more attractive investment.
Additionally, the Treasury Department auctioned $22 billion in 10-year notes at a high yield of 2.982 percent. The bid-to-cover ratio, an indicator of demand was 2.59. The previous auction came in at 3.00/2.6.
Forecast
Early Tuesday, the Australian and New Zealand Dollars are trading lower as investors wait for news from the summit between Trump and Kim Jong-un. Traders are showing almost no reaction to economic data from Australia.
Traders may also be positioning themselves ahead of the release of U.S. consumer inflation data at 1230 GMT. The CPI is expected to rise 0.2% and the Core CPI is expected to come in at 0.1%.
At 0221 GMT, the AUD/USD is trading .7605, down 0.0006 or -0.08% and the NZD/USD is at .7020, down 0.0006 or -0.08%.
Earlier in the session, NAB Business Confidence was 6, but the previous report was revised higher to 11. Home Loans dropped 1.4%, better than the -1.7% estimate and -2.3% previous report.
Stronger than expected CPI data could drive the AUD/USD and NZD/USD lower.
This article was originally posted on FX Empire
