NZD/USD & AUD/USD Weekly Forecast
Both currency pairs posted stellar gains last week, benefits that were fueled by dovish comments from the U.S. Federal Reserve and the positive outlook from the trade talks in Beijing between the U.S. and China.
Since the first of the year, including the stock market gains, the global rate has been rising, with emerging markets strengthening and commodity prices being firmed, and most importantly, commodity currencies like Canadian, Australian, and New Zealand Dollars have outperformed.
Most of the buying spree on these currencies started on January 4, when Fed Chair Jerome Powell gave a green light on the rallies in stocks, commodities, and currencies when he acknowledged the on-going strength in the U.S. economy.
Comments that quieted the critics on those who thought he was too optimistic about the economy. But all they did was excited investors by saying the Federal Reserve would take a more patient approach toward policy decisions in 2019.
At this point, the current focus for Aussie and Kiwi traders on the coming week would be to go for further developments over U.S. and China trade relations and the ongoing U.S. government shutdown, which seems to have no end.
It means that this week will be driven by the U.S. Dollar and the appetite for risky assets, which until now have continued to make commodities more desirable assets, giving currency-linked products a boost.