AUD/NZD stuck in a phase of consolidation, awaiting next key data releases
- AUD/NZD holds in a tight spot following steep downside from 1.08s.
- Markets will soon switch attention to Aussie data and RBA meeting.
AUD/NZD is currently trading at 1.0392 having travelled in Asia between 1.0386 and 1.0400 having started out the year in a chop between 1.0450 and 1.0310 and remains broadly directionless.
AUD/NZD has been in the consolidation of the late 2019 sell-off from upon the 1.08 handle to aforementioned lows. While we have been somewhat dry of domestic data of late, with much of the attention on the Australian bush firs and how the Chinese yuan will perform relative to the recent signing of the US/Chinese trade deal, in the lead into the Reserve Bank of Australia in the 4th February, we will start to see some critical economic data again.
RBA coming back into focus
Looking to both the labour market and the Consumer Price Index for Australia, analysts at ANZ Bank forecast is for headline inflation of 0.7% QoQ in Q4, with the annual rate rising to 1.9%.
"Our forecast for trimmed mean inflation is in line with what the RBA published in the November SoMP. Although inflation is certainly important to the RBA, we think at this stage what happens with the labour market data on 23 January is key to whether the RBA cuts in February."