AUD/USD and NZD/USD Fundamental Weekly Forecast – RBA Minutes, New Zealand GDP on Tap This Week
The Australian and New Zealand Dollars could start the week under pressure due to reports of additional U.S. tariffs on China. The Wall Street Journal reported Saturday, citing individuals familiar with the matter that President Trump is planning to impose a fresh round of tariffs targeting about $200 billion in Chinese goods.
The Australian and New Zealand Dollars rose last week. The currencies were driven higher by a weaker U.S. Dollar. The catalysts behind the bullish price action were optimism over U.S.-China trade relations and weaker-than-expected U.S. producer and consumer inflation data.
For the week, the AUD/USD settled at .7155, up 0.0049 or +0.69% and the NZD/USD finished at .6546, up 0.0012 or +0.19%.
The Aussie was also supported by strong domestic employment data. The government reported the Australian economy added 44,000 jobs in August in seasonally adjusted terms, well above forecasts of an 18,000 gain. Overall participation levels edged higher, which left the unemployment rate steady at 5.3%. Quarterly data on the underemployed, fell by 0.3% to 8.1%.
The good news helped drive up Australian bond yields which made the Australian a more attractive investment, at least temporarily. However, it was not good enough to sway Reserve Bank of Australia policy. The fall in underemployment is considered a positive sign, but the RBA is waiting for consistent growth in wages before it will consider a rate hike.
The AUD/USD and NZD/USD gave back some of its gains on Friday in reaction to rising U.S. Treasury yields ahead of a widely expected Fed rate hike later this week. The price action was driven by upbeat U.S. retail sales and consumer confidence reports. A report that President Trump told his aides to proceed with tariffs on about $200 billion worth of Chinese imports also rattled investors.