- AU PMI Construction 46.7 vs. 50.8 Previous
- RBA Leaves Rates Unchanged at 1.75%
- RBNZ Leaves Rates Unchanged at 2.25%
- AU Employment – Potential downside surprise given weaker job numbers in manufacturing and construction sectors
- NZ Q1 GDP – Potential upside surprise given strong trade data in the first quarter
- Support 7250 then 7150
- Resistance 7500
The Australian and New Zealand dollars continued to move lower against the greenback but with the Federal Reserve poised to leave interest rates unchanged, the yield advantage of AUD and NZD should limit losses for these currencies. The Reserve Banks of Australia and New Zealand made it clear this week that they have no immediate plans to ease monetary policy. AUD and NZD soared as a result and we believe that pullbacks should be bought against the U.S. dollar and other major currencies. Chinese data has been decent and Sunday’s industrial production and retail sales reports shouldn’t pose much threat to these currencies. Australia has employment reports and New Zealand has its GDP numbers scheduled for release next week. NZ GDP is expected to be strong thanks to the improvement in trade activity. Australian employment on the other hand could soften with the manufacturing and service sectors reporting job losses. We like buying AUD/USD on the 73-handle and NZD/USD closer to 70 cents.