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Despite RBA Lowe's testimony, AUD/NZD remains rangebound at 1.1230
Despite RBA Lowe's speech, AUD/NZD has remained rangebound between 1.1220 and 1.1232. RBA Lowe has presented a pessimistic view for the economy, yet wage growth has been stable. The New Zealand dollar has failed to benefit on optimistic Business NZ PMI data.
Despite the testimony of Reserve Bank of Australia (RBA) Governor Philip Lowe, the AUD/NZD pair is demonstrating a mediocre performance in the Tokyo session. After a slight decline, the asset is trading within a tight range of 1.1220 to 1.1232. After attempting to surpass Tuesday's high of 1.1258, the asset declined. The presence of substantial selling pressure at elevated levels has increased the likelihood of a negative reversal.
Lowe has indicated in his testimony that he intends to reduce inflationary pressures. The RBA, unlike other central banks, is not eager to achieve price stability at the expense of economic growth potential.
As said, the central bank is not following a predetermined route; however, market participants should recall that the RBA set a target for the Official Cash Rate (OCR) at 3.85 percent. RBA Lowe has presented a pessimistic view for the economy, despite his belief that "labor cost growth is consistent with inflation returning to goal"
Earlier, the aussie bulls saw pressure after the announcement of Australian employment data that was somewhat weaker than anticipated. The Employment Change statistics decreased to 33.5k versus the anticipated 35k. In its July report, the economy revealed a total of 40,9k layoffs. In addition, the unemployment rate jumped to 3.5%, exceeding both the expectation and the previous announcement of 3.4%.
On the New Zealand front, kiwi bulls have not reacted significantly to the optimistic Business NZ PMI data released early in the Tokyo session. The economic figures came in higher than anticipated, at 54.9 vs 52.5 and 52.7, respectively.
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