AUD/NZD struggles below 1.1000 on downbeat NZ Retail Sales and softer Aussie PMI
- AUD/NZD is hovering around 1.0990 on underperformance from Aussie PMI numbers.
- The NZ Retail Sales have turned negative, which may bring a sell-off in kiwi.
- This week, the major event will be the monetary policy announcement by the RBNZ.
The AUD/NZD pair has witnessed a lack of follow-up buying action in the early Tokyo session after Statistics New Zealand reported negative quarterly Retail Sales. The cross attempted to overstep the psychological resistance of 1.1000 as the quarterly Retail Sales landed at -0.5%, extremely lower than the former figure of 8.3%. However, it failed to do the same amid a lack of follow-up buying.
The cross didn’t find a cumulative buying action as downbeat Aussie's Purchase Managers Index (PMI) numbers by the IHS Markit hammered the aussie bulls. The IHS Markit reported the S&P Global Composite PMI at 52.5, significantly lower than the prior print of 55.9. In a detailed manner, the Manufacturing PMI tumbles to 55.3, against the consensus of 57.8 and the previous figure of 58.8. While the Services PMI edged higher to 53 from the estimates of 52.2 but remained lower than the last recorded figure of 56.6.
On the kiwi front, the interest rate decision by the Reserve Bank of New Zealand (RBNZ) will keep investors on the edge. The RBNZ will announce its interest rate decision n Wednesday and is expected to further elevate its Official Cash Rate (OCR) by 50 basis points (bps). Rising price pressures in the kiwi zone are demanding a spree of rate hikes and an ending of quantitative easing. An interest rate elevation by half a percent will push the OCR to 2%.