- AUD/NZD remains defensive in the Asian session.
- Aussie on back foot after RBA minutes indicates no rate hikes until 2024.
- NZD remains stronger on a robust economic outlook.
The AUD/NZD cross remains subdued in the Asian session. The cross failed to react to the Reserve Bank of Australia’s (RBA) latest monetary policy meeting minutes released on Tuesday. It seems the market already digested the note from the minutes.
At the time of writing, AUD/NZD is trading 1.0765, down 0.10% on the day.
The selling interest in the AUD keeps AUD/NZD off the track to confide in a narrow trade band between 1.0760 and 1.0770.
The RBA minutes on Tuesday indicates that the economy is negatively skewed towards market risk. The ultra accommodative monetary policy will continue as full employment is a top priority for the Central Bank as of now, despite the inflationary threat over rising commodity prices.
Moving on, the ongoing trade hustle between Australia and China continues to haunt the aussie amid cancelled agreements and sharp statements against each other.
China is the biggest trading partner for both antipodeans. The recent spat is affecting the Australian dollar negatively across the board.
On the other hand, Kiwi enjoyed rising commodity prices and a string of positive economic data, which keeps NZD a leg higher against the aussie. Business NZ performance of Service Index rose to 61.2 in April, the highest reading since the survey began in 2007.
As per the Westpac, the New Zealand economy is expected to pick up this year on the back of strong commodity prices and a robust manufacturing sector. Domestic demand is the sole factor of the economic recovery in New Zealand backed by increased household spending, construction activities and lower than expected unemployment.
It is worth noting that, S&P 500 Futures are trading higher at 4169 with 0.28% gains on Tuesday hinting at the risk-on mood in the market. A beneficial factor for the highly risk-sensitive Kiwi.