AUD/USD and NZD/USD Fundamental Daily Forecast – NZD Surges After Reserve Bank Appoints New Governor

The New Zealand Dollar and Australian Dollar are trading higher shortly before the U.S. opening. The Kiwi is surging on domestic news, helping to drag up the Aussie. There were no major economic reports and fresh economic data in the U.S. is going to be scarce with most investors awaiting Wednesday’s U.S. consumer inflation data and the Fed’s interest rate decision.

At 1120 GMT, the NZD/USD is trading .6908, up 0.0071 or +1.04% and the AUD/USD is at .7522, up 0.0014 or +0.19%.

Forecast

NZD/USD and AUD/USD traders are going to continue to monitor progress on U.S. tax reform today, but this news is likely to take a backseat to the news from New Zealand.

The New Zealand Dollar is surging against the U.S. Dollar Monday on the news that NZ Superannuation Fund chief Adrian Orr was named as next governor of the Reserve Bank. Traders are buying the Kiwi because they believe the new governor is more acclimated with the business community and possibly more hawkish than the incumbent.

Finance Minister Grant Robertson said Orr came with the unanimous recommendation of the Reserve Bank’s board and had “the technical and leadership qualities” to be governor and “the skills necessary to successfully lead the bank through a period of change”.

Position-squaring after last week’s sharp sell-off is helping to boost the Aussie along with the bullish news from New Zealand. Traders are squaring positions ahead of speeches from Reserve Bank of Australia Governor Lowe early Wednesday, followed by RBA Assistant Governor Kent and Thursday’s reports on the Unemployment Change and the Unemployment Rate.