AUD/NZD: Uptrend at risk of stalling - ANZ
The uptrend in the AUD/NZD cross is at risk of stalling in the coming week owing to the reasons mentioned below, according to analysts at ANZ.
“The cross burst higher off the back of strong confidence data in Australia and a soft ANZ Inflation Gauge in New Zealand, and to some degree these releases trumped the ability for data to surprise this week. In New Zealand, core CPI is unlikely to rise enough to shift the RBNZ away from its cautious stance. Expectations are low and, more broadly, the New Zealand economy continues to show clear evidence of tighter capacity relative to Australia, which should ultimately provide a floor for the NZD.”
“Meanwhile in Australia, labour force data will likely be positive again, but the surprise index is suggesting that the recent strong run of data (strong retail, better sentiment, rising job ads) has been calibrated into market expectations. We don’t think another positive employment report will be enough to shift the RBA on the level of spare capacity, thus providing a cap on the AUD.”
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