AUD/NZD drops to 8-day low despite RBNZ’s no OCR change announcement
- AUD/NZD tests 21-day SMA after RBNZ met market-wide expectations of no rate change announcements.
- The US-China trade tensions remain elevated and weigh on commodity-linked currencies.
- The New Zealand Dollar (NZD) traders earlier ignored NZ trade balance data.
Despite the RBNZ’s wait and see approach, AUD/NZD drops to fresh low since September 13 while trading near 1.0720 during early Wednesday.
Even if the Reserve Bank of New Zealand (RBNZ) met a broad consensus of no Overnight Cash Rate (OCR) change announcement, appreciation to employment and inflation pleases the NZD buyers.
Read more: Breaking: RBNZ leaves rates unchanged at 1.00%, Kiwi jumps 20 pips
While Tuesday’s trade-negative statement from the US President Donald Trump at the United Nations General Assembly (UNGA) triggered initial downside of the pair, latest turn in the US-China relations, as can be inferred from the Chinese diplomat Wang Yi’s comments, offered additional weakness to the pair.
On the contrary, traders ignored downbeat trade balance numbers from New Zealand. August month Trade Balance slipped below $-1464M market expectations to $-1565M on YoY while also declining to $-5.48B against $-4.86B forecast on the MoM basis.
Following pair’s initial reaction to the RBNZ, investors will keep eyes on trade/political headlines concerning the US-China trade relations for fresh impulse.
Technical Analysis
The pair needs to provide a daily closing below the 21-day simple moving average (SMA) near 1.0720 in order to extend latest downside towards 1.0700 round-figure. Meanwhile, buyers will look for a sustained break of 1.0790 in order to challenge monthly top nearing 1.0850.