- AUD/NZD takes offers to refresh intraday low after strong NZ Q2 GDP.
- New Zealand’s Q2 GDP rose past market expectations and prior on QoQ.
- Mixed concerns surrounding China, RBA versus RBNZ game tests bulls.
- Australia’s employment data for August will be important for fresh impulse.
AUD/NZD renews intraday low around 1.1220 on strong New Zealand (NZ) Gross Domestic Product (GDP) during Thursday’s initial Asian session. Even so, the cross-currency pair remains mildly offered, most cautious, as traders await Australia’s jobs report for August.
New Zealand’s (NZ) second quarter (Q2) Gross Domestic Product (GDP) grew 1.7% QoQ compared to 1.0% market expectations and a prior contraction of 0.2%, per the latest report from Statistics New Zealand. The YoY figures came in as 0.4% versus 0.2% expected and 1.2% previous readouts.
With the firm NZ GDP, the odds of the Reserve Bank of New Zealand’s (RBNZ) stronger rate hikes escalated, which in turn favored the New Zealand dollar (NZD). Also exerting downside pressure on the AUD/NZD pair are the cautious statements from the Reserve Bank of Australia (RBA) at the latest.
Earlier in the day, NZ Finance Minister Grant Robertson crossed wires, via Reuters, while stating that tighter fiscal policy will necessitate difficult decisions. The policymaker also mentioned, “New Zealand is entering a period of more focused spending.”
Elsewhere, fears surrounding China’s economic recovery and the dragon nation’s readiness for heavy stimulus join the geopolitical tussles between the Washington and Beijing to challenge the pair traders. Also, the Russia-Ukraine war and the energy crisis in Europe are some extra catalysts that restrict the pair’s upside momentum.
Above all, anxiety ahead of the next week’s RBNZ and the Fed meeting seems to challenge the AUD/NZD prices.
While portraying the mood, the Wall Street benchmarks printed mild gains while the Treasury yields retreated from the multi-day high, posting mild losses at the end.
Moving on, Australia’s Consumer Inflation Expectations for September, expected 6.7% versus 5.9% prior, will offer immediate directions ahead of the key Aussie jobs report. Forecasts suggest the Aussie Employment Change to increase from -40.9K to 35K while the Unemployment Rate to rise to 66.6% versus 66.4% prior. Even so, the Reserve Bank of Australia’s (RBA) cautious mood might challenge the AUD/NZD bulls.
Also read: Australian Employment Preview: Will labor market upturn save the aussie?
Technical analysis
Although double tops surrounding 1.1255-60 challenge AUD/NZD bulls, the pair’s downside remains elusive unless declining below June’s low of 1.1168.