AUD/NZD steady after NZ employment data meets estimates; traders await Aussie PMIs
- AUD/NZD seesaws, after NZ Employment data came aligned with estimates.
- The AUD/NZD rally to weekly highs after the RBA’s decision was short-lived, as the cross paired those gains.
- Traders await the release of S&P Global PMIs for Australia at around 23:00 GMT.
The AUD/NZD floats at around the 1.0730 area, after Tuesday’s session, witnessed the pair hitting a high of 1.0834. However, it retraced those gains and finished the day with losses of 0.17%.
Futures in Asia are trading with minimal losses. The Reserve Bank of New Zealand (RBNZ) revealed the Financial Stability Report, which showed the New Zealand (NZ) financial system is solid and well prepared to handle higher interest rates, and “international financial disruptions,” said the RBZN’s Governor Adrian Orr.
In the meantime, employment data from New Zealand revealed that the Unemployment Rate stood unchanged at 3.4%, while the Participation Rate had an uptick from 71.7% to 72%. The Labour Cost Index, a measure of Wages, rose 4.5% Q1 YoY compared to 4.3%.
On the Australian side, the Reserve Bank of Australia (RBA) surprised the market by hiking rates 25 bps, to 3.85%, adding that inflation is too high, signaling that higher rates might be needed to curb inflation. The RBA Governor Philip Lowe said, “Looking forward, some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe.”
After the RBA’s rate hike, the swaps market is pricing a 50% chance of a 25 bps rate hike to 4.10% in August.
Aside from this, the Australian economic docket will feature S&P Global PMIs, alongside the AIG Construction PMI, at around 23:00 GMT.
AUD/NZD Technical Levels
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
