AUD/NZD remains sideways around 1.1230 despite RBA Lowe’s testimony

• AUD/NZD has continued to remain sideways in a 1.1220-1.1232 range despite RBA Lowe’s speech.
• RBA Lowe has provided a gloomy outlook on the economy, however, labor cost growth is consistent.
• Kiwi bulls have failed to capitalize on upbeat Business NZ PMI data.

The AUD/NZD pair is displaying a lackluster performance in the Tokyo session despite the testimony of Reserve Bank of Australia (RBA) Governor Philip Lowe. The asset is auctioning in a narrow range of 1.1220-1.1232 after a modest downside move. The asset slipped lower after attempting to surpass Tuesday’s high at 1.1258. The availability of decent selling pressure at elevated levels has triggered the odds of a bearish reversal.

RBA’s Lowe in his testimony has cleared his intentions of scaling down the inflationary pressures. Unlike other central banks, the RBA is not keen to bring price stability at the cost of growth prospects.

The central bank is not operating on a pre-defined path as cited, however, the market participants should remember that the RBA provided a target for the Official Cash Rate (OCR) at 3.85%. RBA Lowe has provided a gloomy outlook for the economy while he believes that ''Growth in labor costs remains consistent with inflation returning to target.''

Earlier, the ausse bulls witnessed pressure after the release of slightly lower-than-expected Australian employment data. The Employment Change data slipped lower to 33.5k vs. the expectations of 35k. The economy reported a layoff of 40.9k employees in its July report. Also, the jobless rate increased to 3.5% against the forecast and the prior release of 3.4%.

On the NZ front, kiwi bulls have not responded much to the upbeat Business NZ PMI data released in the early Tokyo session. The economic data has landed higher at 54.9 against the forecasts of 52.5 and the prior release of 52.7.