AUD/NZD: Sellers dominate ahead of China industrial production, retail sales
- AUD/NZD fails to hold recent recovery and declines to 1.0325 on early Thursday.
- The pair witnessed downside pressure ahead of headline data from China.
- Lesser chances of the RBNZ to announce rate cuts favored New Zealand Dollar (NZD).
AUD/NZD weakens to 1.0325 during early Thursday. While likely disappointment from China’s headline data is weighing on both Aussie and Kiwi, BNZ report that RBNZ isn’t expected to follow RBA’s footsteps of rate-cut seems to help the New Zealand Dollar (NZD) in dragging the quote downwards. Additionally, comments from frontline US lawmakers criticizing China raised doubts over the US-China trade deal and also added pressure on the Australian Dollar (AUD).
China is up for releasing first batch headline data points including industrial production and retail sales. Considering recent weakness in purchasing manager indices (PMIs) and the government’s downgraded growth forecast, chances are high that the data may add worries for the commodity and antipodeans. The YoY figures for January & February month suggest that the industrial production growth may have slowed down by 5.5% from 5.7% while retail sales could decline to 8.1% against 8.2%.
Recently US policymakers are loudly criticizing China, which in turn signal further hardships for a much-awaited trade deal between the US and China. Latest among them was the US secretary of state Mike Pompeo who alleged China of human right violation.
While both the counterparts in the AUD/NZD pair are likely to have the more or less same effect of aforementioned catalysts, NZD gained on recent BNZ report mentioning lesser chances for the Reserve Bank of New Zealand (RBNZ) to follow Reserve Bank of Australia (RBA) in cutting the benchmark rate.
It should also be noted that China is the largest consumer of Australia whereas New Zealand’s biggest customers include Australia ahead of China.
AUD/NZD Technical Analysis
Having failed to sustain recent pullback, the AUD/NZD pair is likely coming down towards 1.0300 and 1.0285 support levels whereas 1.0230 could please bears then after.
On the upside, 1.0350, 1.0365 and 1.0400 can limit the quote’s immediate advance.