AUD/NZD remains lackluster despite weak NZ Trade Balance data

• AUD/NZD has remained muted around 1.1336 after a downbeat NZ Trade Balance data.
• NZ imports have accelerated and exports have declined for the third quarter.
• RBA’s light hawkish September policy is still keeping optimism for aussie bulls.

The AUD/NZD pair has not responded in anticipation amid the release of downbeat NZ Trade Balance data. On a session basis, the asset is extending its recovery above 1.1336 after a firmer rebound from 1.1315. Observing the broader note, the asset is displaying a balanced profile in a 1.1315-1.1367 range after a juggernaut rally from the round-level support of 1.1200.

The deficit in NZ Trade Balance data has widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. Also, the monthly deficit has widened to -$2,447M against the former figure of -$1,406M. The August report on Trade Balance dictates that the imports have advanced to $7.93B vs. the prior print of $7.76B. However, the export numbers have declined to $5.48 in comparison with the former release of $6.35B.

Apart from the Trade Balance data, NZ Westpac Consumer Survey data has also been released. Reading for the third quarter has remained in line with the estimates at 87.6 and higher than the prior figure of 78.7.

The cross is still in the markup phase despite less-hawkish dictations in the Reserve Bank of Australia (RBA) monetary policy minutes release on Tuesday. RBA policymakers discussed rate hikes of 25 or 50 basis points (bps) for the September monetary policy meeting. This indicates that the central bank is not interested in turning much more aggressive and is quite satisfied with the current pace of hiking the Official Cash Rate (OCR).

Also, the alternative of 25 bps was discussed, which signals that the current pace of hiking terminal rates could trim ahead. Investors should be aware of the fact that the RBA elevated its OCR to 2.35% by announcing a fourth consecutive 50 bps rate hike. Adding to that, the RBA has set a target for the OCR at 3.85% and believes that the inflation rate will start declining after making top around 7%.