Talking Points: Australian Dollar, AUD/USD, RBNZ, Australia Lockdowns Following Wall Street’s losses, Asia-Pacific markets may have a shaky start. Today’s focus is on the Reserve Bank of New Zealand and consumer confidence in Australia. After overnight weakening, the AUD/USD is approaching a yearly low. The Asia-Pacific Outlook for Wednesday After major equity indexes on Wall Street sank, Asia Pacific markets are expected to open lower. Concerns over premature central bank tightening were sparked by a hotter-than-expected US inflation reading. The US Dollar and Treasury yields rose as a result, putting downward pressure on the risky New Zealand and Australian currencies. The Reserve Bank of New Zealand’s July interest rate decision will be announced during today’s session. The central bank’s Overnight Cash Rate (OCR) is projected to remain unchanged at 0.25 percent. Rising prices and brisk economic activity, on the other hand, may put pressure on policymakers to accelerate the reversal of its Large-Scale Asset Purchases program, which would be considered as yet another step toward a rollback of the OCR. If the RBNZ’s conclusion is more hawkish than predicted, the New Zealand Dollar will most likely gain. The fight against the highly transmissible Delta Covid strain in Asia poses the greatest threat to economic progress. The island nation has maintained a watchful eye on any viral outbreaks, but at the cost of keeping its border mostly shut. The July Westpac consumer confidence index is due out in Australia. As lockdowns across New South Wales (NSW) impact on mood, the Australian Dollar stays near its 2020 low versus the US Dollar. While today’s Westpac statistic may generate some volatility, Aussie Dollar traders are looking forward to the release of the June employment report on Thursday. Analysts predict that 30k jobs will be added in June, bringing the unemployment rate down to 5.0 percent. A better-than-expected job statistic will be a positive indication for the Australian economy, but the latest wave of Covid-induced lockdowns may cause any hawkish bets to be tempered. A negative jobs data, on the other hand, will likely soften the RBA’s policy outlook, which is already behind the curve in signaling a shift to tighten. AUD/USD Technical Predictions: Overnight, the Australian Dollar fell against the US Dollar, bringing the currency pair back to its 2020 low. If prices continue to fall, the September swing high may reappear to provide some support. If the MACD line passes above the signal line, the MACD oscillator may shortly provide a bullish signal. The sliding 20-day Simple Moving Average provides upside resistance. TradingView was used to construct this AUD/USD daily chart. RESOURCES FOR DOLLAR TRADING IN AUSTRALIA—- Thomas Westwater, a DailyFX.com analyst, wrote this article. Use the comments area below to reach Thomas, or follow him on Twitter at @FxWestwateron./n
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