Since June 14, the AUD/NZD has been under constant selling pressure.
The breakout of the highly contagious Delta form, as well as mixed economic indicators, are weighing on the Australian dollar.
The New Zealand dollar stayed stable due to expectations of a rate hike sooner rather than later.
In the Asian session on Thursday, the AUD/NZD pair lost ground. After reaching a high of 1.0816 on June 11, the pair has been trending downward for the past four sessions.
The AUD/NZD currency pair is currently trading at 1.0720, down 0.21 percent on the day.
The set of elements that influence the performance of the Australian dollar in comparison to its counterpart.
The views of a panel of 23 of Australia’s top economists keep the aussie on edge. Economists predicted that Australia’s economy would struggle to recover following the outbreak. Economic growth is anticipated to slow from 4% this year to 2.2 percent in 2024-25, according to the panelists.
Another factor weighing on the AUD’s performance is the rising tensions between Australia and China. Both of Asia’s major economies have filed complaints with the World Trade Organization (WTO) over tariff concerns. In recent months, relations between the two main trading partners have deteriorated.
The IHS Markit Australian Manufacturing PMI fell from 60.4 in May to 58.6 in June. In June, the Ai Group Australian Performance Manufacturing Index increased to 63.2 from 61.8 the month before.
Despite the increasing domestic coronavirus scenario, market investors remained cautious. In the previous week, new lockdowns have been implemented in Sydney, Darwin, and Perth.
On the other hand, analysts at Australian and New Zealand Bank (ANZ) expect the Reserve Bank of New Zealand (RBNZ) to raise interest rates sooner than projected. The expectations are based on stronger labor market forecasts and an accelerated decline in unemployment to around 4% by 2023.
According to the most recent economic data, New Zealand Building Permits decreased to -2.8 percent in June from 5.1 percent the previous month. In June, the ANZ Business Outlook Index reached -0.6, the highest level in the last four months.
Traders are currently awaiting the release of the Australian Balance of Trade and China CPI statistics to determine market sentiment./nRead More