Currency Pair of the Week: AUD/NZD
Joe Perry
April 12, 2021 2:19 PM
The RBNZ meeting and the Australian Employment are both this week!
Share:
Australia will release their Employment data this week on Thursday. Expectations are for an additional 35,000 jobs to be added to the economy. In February, 88,700 jobs were added, of which just about all were full-time jobs! The unemployment rate is expected to drop from 5.8% to 5.7%. Last week, the RBA met and left interest rates unchanged at 0.1% and began a new A$100 billion bond purchase program. The committee noted that they would leave monetary policy accommodative until actual inflation is withing their 2%-3% target, which they don’t expect to be until 2024. Housing prices are rising, and fears are stirring of an overheated market. If jobs come in stronger than expected, will this force the RBA to reconsider policy with a hot housing market? One idea is that the RBA can focus their bond buying on longer durations. This would help keep rates lower in the belly of the curve. The central bank currently targets the 3-year yield and aims to keep it at 10 bps. Although Australia is behind other countries with its vaccinations, they have done a great job at controlling the coronavirus. Therefore, this isn’t as pressing of an issue, compared to areas such as Europe.