- AUD/NZD drifting in a channel, hard to differentiate between the two currencies.
- All eyes will now turn to the Statement of Monetary Policy (SoMP) for some direction.
AUD/NZD is currently training at 1.0672 having travelled between a low of 1.0661 and 1.0676 the high for Asia, so far, as markets get set for the Reserve Bank of Australia’s Statement of Monetary Policy.
Its been a risk-on end to the week thus far, with both European and US equities rising. This followed some positive data out of Australia and China overnight. It has been long regarded in markets that with China returning to work so soon, Australia and New Zealand’s clean bill of health when it comes to COVID-19 and the Asia Pacific in general, that this should b a positive for AUD.
- The Australian Trade Balance for March: A$+10,602 mln, s/adj (Reuters poll: A$+6,800 mln)
- China’s April Trade data (USD): Surplus beats estimates as exports unexpectedly rise
Indeed, we have seen the combination of risk-on themes support the Aussie higher at the end of this week. However, it has not done much for the cross, with AUD/NZD in a mildly drifting channel with little to separate these currencies.
All eyes turn to the SoMP
Meanwhile, we will unlikely see much action ahead of the Statement of Monetary Policy (SoMP).
The RBA will publish its SoMP, which will give us more details on their GDP growth, inflation and unemployment forecasts. The baseline growth scenario released alongside its policy decision on Tuesday showed a 10% decline in 20H1 GDP, with -6% growth assumed for 2020, while the unemployment rate peaks at 10% and inflation remains below 2% over the next few years,
– analysts at TD Securities explained.