AUDNZD Strengthens Amid RBA Unchanged Interest Rates Release

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The Australian Dollar (AUD) rose against the New Zealand Dollar (NZD) amid stats with respect to the labor cost index released. It remained 0.75% this month, comparing to 0.75% during the month before, equals to what economists had anticipated – i-e 0.75%.

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.

AUDUSD

On the other hand, economists remained optimistic with respect o trade balance data and predicted uprise in the said data by giving a value of 4820 M. It is to be noted that the trade balance represents the difference between import and export levels of the country. Both imports and exports levels stayed in coherence followed by a reasonable domestic demand in terms of imports and an unchanged or improved demand in exchange for exports of the country. So, the pair is believed to start moving positively.

The pair continues sinking since last week, which can be seen in the graph below. It is quite likely that the pair will keep sliding downward until or unless it gets a strong reversal.

Conclusion

Trading AUDNZD may be a better idea for a short term position. However, it may get a reversal around 1.0510 and start declining again. If this happens, trading the pair for a long term position may be avoided.

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