Yahoo Finance AUD/USD and NZD/USD Fundamental Daily Forecast – Seem to be Taking Direction from Investor Demand for Risk
The Australian and New Zealand Dollars finished slightly lower on Wednesday after clawing back from early session weakness. Traders had little to go-by on Wednesday due to geopolitical uncertainty and speculation over the future direction of U.S. trade policy.
On Wednesday, the AUD/USD settled at .7824, down 0.0003 or -0.04% and the NZD/USD finished the session at .7287, down 0.0008 or -0.11%. Both Forex pairs posted inside moves which suggests investor indecision and impending volatility.
Most of Wednesday’s price action was generated by trader reaction to President Trump’s trade plans in response to a U.S. trade gap which reached a 9-year high.
Early in the day, Trump tweeted that he’s asked China to reduce its trade imbalance with America after a report showed the U.S. trade deficit at its highest level since October 2008.
Coming off of a trading session where investors reacted violently to the resignation of Trump’s key economic adviser Gary Cohn, who held opposition to the president’s plan to impose tariffs on steel and aluminum imports to protect U.S. industry, Trump continued to push forward with his ambitious trade plans.
Overnight, Trump tweeted that he’d asked China to cut its trade imbalance with the U.S. by $1 billion while figures showed the U.S. January trade deficit was a wider-than-expected $56.6 billion and the gap with China jumped 17 percent to $36 billion.
Forecast
The Aussie and the Kiwi are trading higher early Thursday in reaction to stronger-than-expected trade balance data from Australia and China.
At 0502 GMT, the AUD/USD is trading .7830, up 0.0006 or +0.08% and the NZD/USD is at .7288, up 0.0013 or +0.02%.
Australia’s trade surplus came in well above expectations in January with the major export sectors showing gains while most import segments posted declines.
According to the Australian Bureau of Statistics, Australian posted a seasonally adjusted trade surplus of A$1.055 billion in January, up from $A1.358 billion deficit in December. The January surplus was more than triple the A$330 million forecast by a Reuters survey and was driven by a 4 percent month-on-month increase in exports and a 2 percent drop in imports.
In other news, China’s exports in February surged 44.5 percent over a year earlier while the politically sensitive trade surplus widened amid mounting tension with Washington.
Customs data early Thursday showed export growth accelerated from January’s 11.1 percent rate while import growth cooled to 6.3 percent from the previous month’s 36.9 percent.
The country’s global trade surplus widened to $33.7 billion from January’s $20.3 billion.
Aussie and Kiwi traders seem to be responding to the movement in the U.S. stock indexes. We’ll be looking for the currencies to strengthen if appetite for risk continues to increase.
This article was originally posted on FX Empire
