Soft Jobs Data Causes Aussie Dollar To Take A Fall While Kiwi Gains BalanceJanuary 21, 2023
On Thursday, a significant reversal was witnessed in the trading price of the Australian dollar. The Australian dollar price did not do well to gain the approval of the traders who wanted to back it up.
The first reason why the Aussie dollar has recorded a dip is because of the constantly rising recession fears in the United States.
Apart from the recession fears, there is the local jobs data from Australia that was soft. This has increased the risk-sensitivity of the currency, pulling its value lower than against the major rivals.
The value of the kiwi dollar has recorded a pull as well in the Thursday trading session. The pull was recorded after it was announced that Jacinda Ardern, the Prime Minister of New Zealand resigned from her position.
Australian Dollar Dipped 0.4%
The latest forex market data shows that the trading price of the Australian dollar has recorded a 0.4% dip against the trading price of the dollar.
This is the lowest level the Australian dollar has hit in a single week. Just a session earlier, the trading price of the Aussie currency had hit a five-month high against the greenback.
The Aussie dollar had reportedly surged to a high of $0.7064 against the dollar a day back. As the trading price of the Aussie dollar came close to hitting 70 cents, it faced major resistance.
The AUD currently has a 14-day MA support level, which currently stands at $0.6889.
Kiwi Dollar Dipped 0.2%
The value of the kiwi dollar recorded a dip as well. The forex market data shows that its price recorded a 0.2% dip versus the trading price of the greenback.
The kiwi dollar was also performing quite well against the dollar a day earlier. It had reportedly hit a high of $0.6530 against the dollar, which was a seventh-month high.
The technical analysis suggests that the kiwi dollar currently has strong support at $0.6360, which means the buyers can push it higher.
Although many thought that the resignation of Jacinda Ardern may help boost the forex rates of the NZ dollar, its price has experienced a pull.
It has been confirmed by the officials in New Zealand that Ardern will be stepping down as the PM of the country in February.
US Data Increased Fears of a Recession
The retail sales data was just shared by the United States Feds for the month of December.
It showed that December month was the worst in terms of retail sales for the entire year. Similarly, the manufacturing output was also the worst as the data shows that it has recorded the worst two-year drop.
After the release of the data, a tremendous amount of fear has been invoked in traders pertaining to the US economy.
Traders and economists are worried that the country with the largest and strongest economy is pacing toward a recession.
On the other hand, the Feds are also concerned about the rising inflation rates.
They are adamant that they will put an end to the rising inflation rates and for this purpose, they will keep their aggression in place for interest rate hikes.
The recent statement released by the Feds has compelled investors to realize that the dollar is a safe haven.
As the trading price of the dollar will keep on rising in the wake of the interest rates, they are building up strong rallies. This is the reason why the trading price of the dollar is being pushed higher.
The Feds are very hawkish about the interest rates and they may not lower interest rates anytime soon. This means that the value of the dollar will keep on rising to make it more profitable in the long-term.
Given the recent statement made by the Feds, they will increase the interest rates without showing any flexibility. This would keep pushing the dollar price higher making it more attractive for traders.