The AUD/NZD pair traded higher since the beginning of the week, as the pair is trying to cover some of its losses recorded last week. The Australian and New Zealand dollars dropped against the U.S. dollar and JPY following losses in commodities and stocks which exhausted demand for higher-yielding currencies.
The Australian dollar was dragged to the downside against greenback, after the RBA released its April meeting’s minutes, signaling no interest rates increase during the upcoming period.
The NZD counties its drop versus American dollar amid strong risk aversion in the financial market, as falling commodity prices along with the sharp decline in stock markets reduced demand for higher-yielding assets.
On Wednesday, the market awaits important data from the Australian economy. Australia is to release the leading index for the month of February at 00:30 GMT that showed a drop by 0.1% in January.
Australia will also release the quarterly import price index at 01:30 GMT that dropped by 3.8% in the quarter of September to December in 2010 and expected with 0.9% rise this quarter.
The pair is likely to be influenced by the Australian data on Wednesday though the volatility will prevail shall the downbeat sentiment continue to dominate the market. Risk aversion will weaken both currencies versus their major counterparts and likely favor aussie over kiwi as risk aversion bolsters gold which keeps aussie supported versus kiwi.
Originally posted here
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