Busy day for the Aussie combined with the big pop in volatility coming soon for the New Zealand dollar makes this range on AUD/NZD one to watch!
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Fresh Market Headlines & Economic data:
- Negotiators from both parties say they have a tentative deal to avoid a US government shutdown
- Small business optimism falls for fifth straight month, NFIB says
- ECB Officials Warn Not to Overreact to Single Data Points
- Bank of England’s Carney sees ‘delicate equilibrium’ as world economy slows
- Brexit: Theresa May promises meaningful vote after more talks with EU
- We’re not ‘purist’ about changing Brexit deal, says UK minister
- Australia Home Loans Sink 6.1% In December
- Corporate China to face a rush of defaults in 2019
- China’s consumption growth likely to slow further in 2019: Commerce ministry
Upcoming Potential Catalysts on the Forex Calendar:
- Fed Williams participates in panel discussion in NY at 3:15 pm GMT
- Fed Potter speaks in NY at 5:30 pm GMT
- Fed Chair Powell speaks in Itta Bena at 5:45 pm GMT
- Australia Westpac Consumer sentiment at 11:30 pm GMT
- Japan PPI at 11:50 pm GMT
- Reserve Bank of New Zealand Monetary Policy statement at 1:00 am GMT (Feb. 13)
What to Watch: AUD/NZD
Nice session for the Australian dollar sparked by a report from NAB that business conditions stabilized in Australia, and likely helped along by a broad risk-on theme to today’s trade due to positive developments to the U.S. government shutdown story and the U.S.-China trade story. It’s likely we’ll continue to see volatility in Aussie pairs if risk sentiment continues to improve this week, and definitely look at AUD/NZD given that the next big event is the Reserve Bank of New Zealand’s monetary policy and interest rate statement coming soon.
It’s likely that the RBNZ’s tone will go from a rate hike stance to a more neutral one on interest rates given the weakening global economic data, so if they turn dovish this week–which is possible after a disappointing quarterly New Zealand employment report last week–look out for a break and hold above the strong resistance area around 1.0530.
On the other side of the coin, the lower probability but potentially bigger move could come if the RBNZ doesn’t lower their growth outlook or keep rhetoric for a possible rate hike, then that could be bullish for the Kiwi, and if we see a break and hold below 1.0475, that could draw in sellers for a momentum move lower.