AUD/NZD oversteps 1.1070 on hawkish RBA, Aussie Employment data in focus
- AUD/NZD has surpassed 1.1070 as RBA has sounded more hawkish in its minutes.
- The RBA also considered the option of elevating the cash rate by 40 bps.
- Aussie’s labor force data will be a key event this week.
The AUD/NZD pair has touched an intraday high of 1.1074 after the Reserve Bank of Australia (RBA) reported its May monetary policy minutes. The cross is observing an establishment above 1.1070 as the RBA sound more hawkish after the interpretation of its minutes released in the Asian session.
The minutes dictate that the RBA policymakers were considering the options of 15 basis points (bps), 25 bps, and 40 bps. As per the minutes, the policymakers ditched the idea of 40 bps to safeguard the economy from the upside risks of inflation. While the 15 bps rate hike would be incompetent with the consistency of changing the cash rate in increments of at least 25 basis points. The minutes from the RBA also dictated that labor cost is rising in a tight labor market and the formation is expected to continue further.
The Aussie dollar is expected to remain in the spotlight this week as investors are awaiting the release of the employment data on Thursday. The street is expecting the job additions in the labor force by 30k, higher than the prior print of 17k. While the Unemployment Rate is likely to be improved to 3.9% from the former figure of 4%.
On the kiwi front, raising fears of a recession in the NZ area due to soaring inflation has kept Kiwis on the backfoot. Also, the kiwi dollar is not performing well on the underperformance of the Business NZ PSI. Business NZ reported the PSI at 51.4, a little lower than the prior figure of 51.5.