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AUD/USD and NZD/USD Fundamental Daily Forecast – Early Price Action Suggests Investor Indecision

James Hyerczyk

The Australian and New Zealand Dollars are trading higher on Friday, reversing yesterday’s weakness. The choppy price action this week reflects investor uncertainty over whether the United States and China will sign some sort of trade agreement in the coming weeks.

During the week, the Aussie and Kiwi were manipulated by reports of a snag in the negotiations over the rollback of tariffs, a delay in the deal until early 2020 and China’s condemnation of U.S. legislation supporting the pro-democracy protesters in Hong Kong.

At 09:16 GMT, the AUD/USD is trading .6792, up 0.0004 or +0.06% and the NZD/USD is at .6417, up 0.0016 or 0.24%.

At the end of the week, however, a report from The Wall Street Journal saying that China had invited the U.S. Trade Representative and Treasury Secretary to Beijing for further talks, provided some support.

Although the Reserve Bank of Australia (RBA) is scheduled to meet on December 3 as of November 22, there is only a 22% chance of an interest rate cut. So there is no rate cut pressure on the Australian Dollar.

After the Reserve Bank of New Zealand (RBNZ) surprised investors by keeping rates on hold earlier in the month, the NZD/USD has stagnated. It’s not likely to move until there is a major breakthrough with the trade deal, or until the major bank’s figure out the central bank’s next move.

Daily Forecast

On the data front, manufacturing PMI (Purchasing Managers’ Index) and Services PMI figures for November will be released at 14:45 GMT. Consumer sentiment for November and the latest Kansas City Fed Survey will follow slightly later in the session.

Investors will also have the opportunity to react to comments from Federal Reserve Bank of New York President John Williams on Friday morning.

After this week’s slew of positive and negative remarks over a U.S.-China trade deal, things are quiet on Friday. This is leading to the inside trade on the AUD/USD and NZD/USD daily charts. This pattern tends to indicate investor indecision and impending volatility.

This article was originally posted on FX Empire