AUD/NZD [Analysis and News]

[RusefSandi]

AUD/NZD on track to extend losses below 1.0450 on RBNZ rate hike expectations​

• AUD/NZD has been under continuous selling pressure since June 14.
• The Aussie weigh down by the outbreak of the highly contagious Delta variant and mixed economic data.
• Kiwi remains grounded on RBNZ upcoming policy meeting on rate hikes hope.

AUD/NZD retreats after printing some initial gains on Monday in the Asian session. The pair has been in continuous downside momentum for above one month, after making a high at 1.0824 on June 14. At the time of writing, AUD/NZD is trading at 1.0454, up 0.27% for the day. A combination of factors weighing the performance of the Australian dollar against its counterpart. The Aussie remained pressurized on the extension of lockdown amid renewed COVID-19 jitters and downbeat economic data at home.

Market participants remained cautious amid the worsening domestic coronavirus situation. New South Wales state recorded a nearly 20% jump in fresh coronavirus infections overnight. Australia’s New Home sales plunge 20.5% on monthly basis. It is worth noting that S&P 500 Futures were trading at 4,452 with 0.22% losses.

On the other hand, Kiwi gained on the better COVID-19 situation. There were no fresh cases recorded in the community as per the Ministry of Health. The Reserve Bank of New Zealand (RBNZ) is expected to announce interest rates hike in its upcoming policy meeting. The recent Kiwi’s gains were trimmed after not so enthusiastic data.

 

[Agamatius]

Yes, the economic situation in Australia is worsening. The epidemic has hit Australian exports, especially education and tourism, which are heavily dependent on the Chinese. In addition, China, whose economic activity has stalled because of the epidemic, is a major consumer of the metals, oil and gas that Australia exports.
The impact of a coronavirus outbreak on the Australian economy will be more significant than the effects of wildfires. China accounts for more than a third of Australia's exports. A temporary ban on Chinese tourists and restrictions on the return of Chinese students studying at Australian universities could have significant consequences for education and tourism in that country.