Yahoo Finance AUD/USD and NZD/USD Fundamental Daily Forecast – Slow Trade Ahead of RBA Minutes, US-China Trade Talks
The Australian and New Zealand Dollars are trading lower on Monday, showing little reaction to last week’s late rally. The lack of fresh economic data today may be behind the limited price action. Additionally, traders may also be also be squaring positions ahead of domestic reports later this week.
At 1115 GMT, the AUD/USD is trading .7307, down 0.0009 or -0.14% and the NZD/USD is at .6622, down 0.0014 or -0.21%.
Caution ahead of the planned trade talks later this week between the United States and China is also helping to limit gains. Traders are hoping the talks will ease tensions between the world’s two biggest economies, however, they are not betting heavily on a positive outcome because the meeting are being called “low-level”.
There are also no new developments over the currency crisis in Turkey. The price action in the Turkish Lira suggests policymakers may have stemmed the tide with their decisions, which included ending short-selling. Over the week-end, several rating agencies downgraded the country’s creditworthiness, however, these moves were widely expected. Furthermore, the country is preparing for a three-year holiday.
The AUD/USD and NZD/USD are showing no response to higher U.S. equity markets which tends to indicate increased demand for higher risk assets. A drop in U.S. Treasury yields also seems to be having little or no effect on demand for the Aussie and Kiwi. Higher gold prices, which tend to indicate demand for commodities, are also having a limited effect on the currencies.
Aussie traders appear to be taking to the sidelines ahead of a speech by Reserve Bank Governor Philip Lowe at 2200 GMT and the release of the RBA Monetary Policy Meeting Minutes at 0130 GMT.
Kiwi traders are preparing for Tuesday’s reports on Visitor Arrivals and Credit Card Spending. Early Wednesday traders will get the chance to react to a report on Retail Sales.
Today is a light day as far as U.S. economic data is concerned. At 1500 GMT, Federal Open Market Committee Member Raphael Bostic is scheduled to speak. Fed speakers have been quiet this month. Although the Federal Reserve remains upbeat on the outlook for U.S. growth, which grew at a 4.1 percent pace in the second quarter, a number of officials including Atlanta Fed President Raphael Bostic have warned that the trade dispute is a downside risk for the economy.
This article was originally posted on FX Empire
