AUD/NZD drops below 1.0730 as focus shifts to NZ GDP and Aussie Employment data
- AUD/NZD has failed to sustain above 1.0730 as investors turn anxious ahead of NZ and Australian data.
- Higher Australian employment generation and a lower jobless rate are indicating an expression of higher forward earnings.
- Australian Consumer Inflation Expectations at 5.4% indicate that chances are few that the RBA would restore price stability.
The AUD/NZD pair has sensed selling pressure while attempting to sustain above the critical resistance of 1.0730 in the Asian session. The cross is struggling in extending its recovery as investors are getting anxious ahead of the release of New Zealand’s Gross Domestic Product (GDP) and Australian Employment data, which will release on Thursday.
According to the estimates, the NZ economy has contracted by 0.2% vs. a growth of 2.0% witnessed in the third quarter. The annual GDP (Q4) has expanded by 3.3%, lower than the prior expansion of 6.4%. A decline in the growth rate indicates subdued demand from households, which will relieve the stress of Reserve Bank of New Zealand (RBNZ) policymakers, which are making efforts in decelerating inflation expectations.
Meanwhile, the release of the Australian Employment data would bring a power-pack action to the Australian Dollar. As per the consensus, the Australian economy has added fresh 48.5K jobs in February vs. a lay-off registered in January of 11.5K. And, the Unemployment Rate is expected to drop to 3.6% from the former release of 3.7%. Higher employment generation and a lower jobless rate are indicating an expression of higher forward earnings as upbeat demand for labor would be offset by bumper offerings from firms.
An upbeat Australian labor market data could propel the inflationary pressures again as households would be equipped with higher funds for disposal.
Apart from that, Consumer Inflation Expectations (Mar) data that demonstrate inflation projections for the next 12 months is expected to increase to 5.4% from the former release of 5.1%. An occurrence of the same would support more rates from the Reserve Bank of Australia (RBA).