AUD/NZD forecast after the Australian jobs data and NZ budget

May 17, 2023 09:41 PM PDT | By Invezz

AUD/NZD forecast after the Australian jobs data and NZ budget — Image source: Invezz

Australia jobs numbers

The most important AUD news came out on Wednesday when the Australian statistics agency published the latest wage price index data. The report showed that the WPI jumped by 0.8% in the first quarter, lower than the median estimate of 0.9%. This increase translated to a year-on-year increase of 3.7%.

The WPI is one of the most important figure that the Reserve Bank of Australia (RBA) looks at when making its decision. Minutes published earlier this week showed that the bank believes that wage growth is still too high. This explains why it decided to hike rates by 0.25% this month.

The AUD/NZD exchange rate then reacted to the latest Australian jobs data. According to the ABS, the country’s unemployment rate jumped from 3.5% to 3.7% in April. Economists were expecting the rate to remain unchanged.

The participation rate rose to 66.7% as the economy lost over 4.3k jobs during the month. Despite this, the Australian economy is doing well, with the labor shortage in many industries continuing.

The other catalyst for the AUD/NZD pair was the latest New Zealand PPI data. According to the statistics agency, the producer price index input slipped to 0.2% in Q1 while the PPI output dropped to 0.3%. PPI is a good measure of inflation.

New Zealand also published its national budget which contained a worse-than-expected budget deficit. It hopes that it will return to a budget surplus by 2027. Also, the government sees the unemployment rate rising to 5.3% later this year.

AUD/NZD forecast

AUD/USD chart by TradingView

The AUD to NZD exchange rate has been moving downwards in the past few weeks. On the 4H chart, it moved below the 50-period exponential moving averages while the Relative Strength Index (RSI) is hovering slightly above the oversold level. Further, the awesome oscillator has moved below the neutral point.

Therefore, the AUD/NZD pair will likely continue falling as sellers target the next key support at 1.1.0590, the lowest point on April 5.

The post AUD/NZD forecast after the Australian jobs data and NZ budget appeared first on Invezz.

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