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  • AUD/NZD  struggles to stay over the line at 1.0700.
  • GDT dairy auction resulted in a 0.4% fall in prices overall, while markets await Aussie GDP.

AUD/NZD has ducked away from the 1.07 handle of late, unable to find further traction despite what appears to be a divergence between the relative central banks following a steady hand from Reserve Bank of Australi yesterday.  

AUD/USD started a recovery from 0.6695 to above 0.6720 as the RBA repeated its upbeat growth outlook while NZD/USD climbed from 0.6295 pre-US ISM manufacturing to 0.6330 – (The data arrived at 49.1 for August versus 51.2 in July which was the first sub-50 reading since August 2016 and is the weakest figure since January 2016).

Closer to home, for the Kiwi, the GDT dairy auction resulted in a 0.4% fall in prices overall, with key product whole milk powder down 0.8%, skim up 0.7%, and butter unchanged. A combination of all these inputs has seen the AUD/NZD cross move higher from 1.0660 to 1.0709 for a four-month high before wilting at this psychological area.  

Australia’s Quarter 2 GDP on the cards

Looking ahead, we have some key data coming from Australia’s Quarter 2 GDP – Analysts at Westpac cam with a forecast of 0.5%qtr, 1.4% year, in line with the updated Bloomberg consensus – “This is at least a long way from the recent talk of a headline zero or negative quarterly number, but with population growth around 1.6%yr, it is a contraction in output per capita. In yesterday’s statement, the RBA conceded H1 2019 growth “has been lower than earlier expected” but insisted that growth “is expected to strengthen gradually to be around trend over the next couple of years.”

AUD/NZD levels