Yahoo Finance AUD/USD and NZD/USD Fundamental Weekly Forecast – Weekly Highlights Include RBA, Fed Minutes
The Australian Dollar rose against the U.S. Dollar as investors shed the Greenback due to inflation fears. A recovery in the global equity markets also fueled the rally as it increased demand for commodities and other higher risk assets.
The AUD/USD settled the week at .7907, up 0.0099 or +1.26%.
The Australian employment report came in slightly better than expected. It also showed that Australia has now created jobs in each of the past 16 months, the longest stretch in history.
According to the Australian Bureau of Statistics (ABS), employment grew by 16,000 in seasonally adjusted terms in January, marginally topping forecasts for an increase of 15,300.
Australia’s unemployment rate fell to 5.5%. That was in line with market expectations, and below the upwardly-revised 5.6% level of December.
The New Zealand Dollar also rallied against the U.S. Dollar last week to a six-month high. It was the Forex market’s second best performer next to the Japanese Yen.
The NZD/USD settled at .7388, up 0.0138 or 1.90%.
New Zealand inflation expectations came in at 2.1%, slightly higher than the previous 2.0%. The Business NZ Manufacturing Index came in at 55.6. The previous report was 51.1.
In other news, U.S. consumer prices rose considerably more than expected in January, fueling fears that inflation is about to turn dangerously higher.
The Consumer Price Index rose 0.5 percent last month against projections of a 0.3 percent increase, the Labor Department reported last Wednesday. Excluding volatile food and energy prices, the index was up 0.3 percent against estimates of 0.2 percent.
The report indicated that price pressures were “broad-based,” with rises in gasoline, shelter, clothing, medical care and food.
Forecast
On Monday, Australian Dollar traders will get a chance to react to the latest Monetary Policy Meeting Minutes from the Reserve Bank of Australia. Traders will be looking for information as to the timing of the next RBA rate hike.
Early Friday, New Zealand will release its latest data on retail sales. They are expected to rise 1.4%, up from the previously reported 0.2%.
The major market-moving event this week is likely to be the Federal Open Market Committee Minutes on Wednesday. They are expected to provide insight into how many interest rate hikes to expect from the Fed in 2018. A hawkish Fed could have a negative influence on the AUD/USD and NZD/USD
This article was originally posted on FX Empire
