AUD/NZD Strengthened by Wage Growth Optimism
The Australian Dollar New Zealand Dollar (AUD/NZD) exchange rate continued to rise during Thursday’s session on the bank of some positive wage growth prospects.
At the time of writing AUD/NZD is up nearly 0.4% from its opening levels on Thursday, with the pairing having rallied around a cent from Wednesday’s low.
Australian Dollar (AUD) Lifted as Employment Prospects Improve
The Australian Dollar extended its rally against the New Zealand Dollar during today’s session as markets welcomed some positive job vacancy figures.
According to data published by the Australian Bureau of Statistics (ABS) total jobs vacancies rose to 220,800, in the three months to February up 4.4% from the previous month’s reading.
With the data also revealing that the number of unemployed Australian’s per vacancy, it suggests that Australia’s market conditions continue to strengthen.
Analysts suggest that this in turn should led to a pick up in wage growth, although the acceleration in wages is still likely to be at a gradual pace
Callam Pickering, APAC economist at Indeed.com said;
‘That’s a strong result that indicates that labour market slack in Australia continues to diminish, vacancies are rising across every state.
While there is still some way to go before stronger employment triggers higher wage growth, rising vacancies indicates that we are getting closer to that point.
Some firms are reporting a greater difficulty in finding staff and that may force firms to sweeten their offers for certain roles.’
Meanwhile Wednesday’s fall in equity markets weighed heavily on the New Zealand Dollar today, especially in the absence of any domestic data to support it.
On top of this the thin trading volumes over the long Easter weekend also means that the market is ‘very delicately poised’, something that could see some repositioning against both the ‘Kiwi’ and the ‘Aussie’.
AUD/NZD Forecast: RBA to Remain Dovish?
Looking ahead to next week’s session the AUD/NZD exchange rate may slip as the Reserve Bank of Australia (RBA) concludes on Tuesday.
While markets are likely to have already priced in the RBA’s decision to leave rates on hold again in April, the Australian Dollar is still likely to tumble if policy makers remain cautious in their outlook to the rest of 2018.
Meanwhile the New Zealand Dollar may also slide at the start of next week’s session if dairy prices tumble again following the latest global dairy auction.