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Weekly roundup: AUD, NZD benefits from political uncertainty abroad, but economic data mixed

currency-newsWeekly roundup: AUD, NZD benefits from political uncertainty abroad, but economic data mixed
AUD and NZD were on a mixed footing last week, with concerns abroad helping to fuel demand for the commodity-correlated currencies, but domestic data proving disappointing in several instances.

The Australian dollar and New Zealand dollar were on very mixed form last week, reacting well to political uncertainties in the UK, but trading rather more uncertainly in the face of surging US December rate hike bets.

The New Zealand data calendar was rather empty, but Australia had a busy week of ecostats. Tuesday’s Reserve Bank of Australia (RBA) interest rate decision saw policymakers remain firmly in the neutral camp, holding rates steady at 1.50% for the thirteenth meeting in a row.

While RBA Governor Philip Lowe sounded more positive on the economy, he also warned that the current strength of the Australian dollar would cause problems for the economy. Lowe claimed that a strong AUD would weigh on the employment outlook, and could result in the economy recovering at a slower pace than forecasts currently suggest.

The New Zealand dollar, meanwhile, was softened by the week’s only major release; the results of the latest Global Dairy Trade auction. The average winning price declined -2.4% on the previous event, undoing the rises seen in the previous two auctions.

Thursday rounded off the antipodean data calendar with mixed Australian releases. Although the Australian trade balance for August showed a stronger surplus than expected, clocking in at A$989 million instead of at A$850 million as forecast, retail sales contracted -0.6% instead of growing 0.3%.

It’s not an overwhelming week in terms of Australian and New Zealand data this week. Tomorrow’s Australian NAB business surveys and Westpac’s consumer confidence indices could cause some movement for AUD, while Thursday’s ANZ consumer confidence and Business NZ performance of manufacturing index will be the most influential domestic data from New Zealand this week.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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