Yahoo Finance AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Helped by Upbeat Trade Deal News; Better Retail Sales Boost Kiwi
The Australian and New Zealand Dollars are trading higher on Monday. The Aussie is being helped by an optimistic view over U.S.-Chinese trade relations. The Kiwi is being supported by positive domestic economic data. The longer-term outlook is largely being influence by central bank policy. The U.S. Federal Reserve is still tightening although it has put rate hikes on hold. The Reserve Bank of Australia is neutral and the Reserve Bank of New Zealand is still open to a rate hike.
At 08:06 GMT, the AUD/USD is trading .7154, up 0.0026 or +0.36% and the NZD/USD is at .6870, up 0.0020 or +0.30%.
Australian Dollar
The AUD/USD is trading higher on Monday in response to the news that U.S. President Donald Trump is planning to delay a list of additional Chinese tariffs that were scheduled to begin on March 1. The news provided the momentum to drive prices higher because it likely means both the United States and China are close to hashing out their long awaited trade deal. The Australia economy is often viewed as a proxy for the Chinese economy because they are major trading partners.
Trump didn’t provide much detail on the decision, but in a series of posts on Twitter, he cited “substantial progress” in bilateral talks between the two economic powerhouses.
In his Tweet over the weekend, Trump said, “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues, including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, a Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”
In other news, China has committed to buying up to $1.2 trillion in U.S. goods, though as late as last week, the two sides were said to be far apart on issues concerning the forced transfer of intellectual property.
New Zealand Dollar
The NZD/USD is being lifted by the news that retail sales increased more than expected in the December quarter. Sales were lifted by spending on pharmaceuticals, duty-free goods, and food services.
Retail sales volumes rose a seasonally adjusted 1.7 percent in the December quarter from a revised 0.3 percent gain in the September period, Stats NZ said. That’s higher than the 0.5 percent gain expected by economists.
Daily Forecast
The economic reports are scheduled to be light in the U.S. on Monday. Final Wholesale Inventories are forecast to have risen 0.3%. FOMC Member Clarida is scheduled to speak.
News about a U.S.-China trade deal is expected to continue to underpin the Aussie and Kiwi throughout the session. Increased appetite for risk and Treasury yields should also have an impact on the price action. Despite a slew of U.S. economic data this week, the biggest influence on the direction of the AUD/USD and the NZD/USD will be U.S. Federal Reserve Chairman Jerome Powell’s testimony before Congress on Tuesday, Wednesday and Thursday.
This article was originally posted on FX Empire
