AUD/NZD Daily Fundamental Analysis for May 24, 2011

By ForexMansion.com

The AUD/NZD pair dropped with the beginning of the week on Monday, as the Aussie and the Kiwi retreated against the US dollar. Risk aversion is back to dominate markets, dampening demand on higher-yielding currencies and assets.

The Australian dollar dropped against its major counterparts as investors increased their bets that the Reserve Bank of Australia (RBA) will keep the rates steady during the next Bank's meeting as central banks aims to support economic growth.

On the other hand, investors shifted their trading to the safe assets, as concern over Europe's sovereign debt crisis mounted.

Moreover, New Zealand's currency slid against majors, and it declined from the highest in more than two weeks versus the U.S. dollar before reports forecasted to show European services and manufacturing growth slowed and U.S. new home sales stalled, adding more signs that the global growth is losing momentum.

On Tuesday, the New Zealand is to release its only data during the week, with the Reserve Bank of New Zealand 2-year inflation expectation for the second quarter at 03:00 GMT; the previous reading was 2.6%.

The Australian economy is not going to issue any fundamental on Tuesday, so the AUD/NZD pair's movements will be based on the New Zealand news and the market sentiment.

Originally posted here

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