Yahoo Finance AUD/USD and NZD/USD Fundamental Daily Forecast – Will Be Supported By Increased Demand for Risky Assets
The Australian and New Zealand Dollars extended their short-term gains against the U.S. Dollar on Monday. Volume and volatility were light during the session, reflecting the lack of major economic data and general uncertainty ahead of the central bankers’ symposium at Jackson Hole, Wyoming later this week.
The AUD/USD settled at .7940, up 0.0013 or +0.17% and the NZD/USD closed at .7326, up 0.0017 or +0.23%.
There was no major news on Monday from the U.S. Buyers, however, came in lightly in reaction to a drop in U.S. Treasury yields and the U.S. Dollar.
Forecast
There seems to be an upside bias developing by the AUD/USD and NZD/USD. This could be related to the absence of a major sellers this week. There aren’t any major economic events on Tuesday so short-covering after last week’s steep sell-offs are likely to guide prices.
Falling Treasuries and increased demand for higher risk assets will be supportive for the higher-yielding Aussie and Kiwi.
Aussie investors are also likely to be influenced by iron ore prices. Higher iron ore and other base metals will be supportive for the Australian Dollar. This is because the industrial metal is Australia’s largest goods export by dollar value.
There are also reports that high Chinese steel margins are encouraging Chinese steep producers to boost output which in turn leads to higher demand for iron ore. Higher demand should help the iron ore prices as well as the Australian Dollar.
On Tuesday, investors will get the opportunity to react to China’s Conference Board’s Leading Index, the U.S. Home Price Index and the U.S. Richmond Manufacturing Index.
Use U.S. Treasury yields and the U.S. stock markets for direction today.
This article was originally posted on FX Empire
