Daily Fundamental Forecast AUD / USD and NZD / USD – Supported by Soaring Commodity Prices, Weak US Employment Report
The Australian and New Zealand dollars surged against the US dollar on Friday, pushed higher by soaring commodity prices and falling yields on US Treasuries after the United States announced growth in the dollar. lower employment than expected. The Australian hit their highest level since February 26, while the Kiwi hit their highest level since March 3.
On Friday, AUD / USD stood at 0.7844, up 0.0058 or + 0.75% and NZD / USD ended at 0.7283, up 0.0048 or + 0, 66%.
Soaring iron ore drives Australian dollar
The Australian was supported by a strong recovery in prices for Australia’s main export producer, iron ore. Futures on the key ingredient for steelmaking hit an all-time high on Friday, pushing spot prices to an all-time high above $ 200 a tonne, Reuters reported.
China’s imports of iron ore have increased 6.7% this year so far, while those of natural gas have jumped more than 22%. Both products are Australia’s main export producers.
Chinese import growth supports both the aussie and the kiwi
The Aussie and the Kiwi, traded as a liquid substitute for the Chinese yuan, were also boosted by impressive trade data from China, which showed import growth reaching a decade-high.
China extended its impressive trade performance in April, with an unexpected acceleration in exports and import growth peaking in a decade, boosting the world’s second-largest economy.
Dollar exports jumped 32.3 percent from a year earlier to reach $ 263.92 billion, China’s General Administration of Customs said on Friday, beating analysts’ forecasts by 24.1 percent and the 30.6% growth reported in March.
Imports were also impressive, increasing 43.1% from a year earlier, the fastest gain since January 2011 and picking up from growth of 38.1% in March. It was also slightly faster than the 42.5% increase announced by the Reuters poll, supported by rising commodity prices.
Surprise on the non-farm payroll in the United States
The non-farm payroll in the United States only increased by 266,000 jobs last month after increasing by 770,000 in March, the Department of Labor reported.
Economists polled by Reuters predicted a payroll increase of 978,000 jobs. The unexpected slowdown in job growth was likely due to labor and raw material shortages as the economy recovered from the coronavirus pandemic.
The benchmark 10-year yield, which fell to 1.46%, the lowest since March 4, was last up 1.60 basis points on the day to 1.5771%, standing below a 14-month high of 1.776% reached on March 30.
The 30-year yield fell to its lowest level since March 1 at 2.158%. It was last 4.4 basis points higher at 2.28%.
After trading higher earlier in the session, AUD / USD and NZD / USD rallied further on lower Treasury yields.