Currency markets remain focused on the US dollar amid heightened expectations that the Fed will might well have to taper sooner rather than later.

However, antipodean currencies (NZD and AUD) are set to jostle for the limelight as well, amid an eventful week for global markets:

Monday, August 16

  • JPY: Japan industrial production, GDP
  • CNH: China industrial output, retail sales

Tuesday, August 17

  • AUD: Reserve Bank of Australia policy meeting minutes
  • EUR: Eurozone GDP
  • GBP: UK jobless claims, unemployment rate
  • USD: US retail sales, industrial production
  • Gold: Fed Chair Jerome Powell speech
  • Walmart 2Q earnings

Wednesday, August 18

  • NZD: RBNZ policy decision
  • EIA crude oil inventory report
  • USD: FOMC minutes
  • Gold: Dallas Fed President Robert Kaplan speaks
  • Tencent 2Q results

Thursday, August 19

  • AUD: Australia unemployment rate
  • USD: US weekly jobless claims

Friday, August 20

  • JPY: Japan CPI
  • CNH: China loan prime rate
  • GBP: UK consumer confidence, retail sales
  • CAD: Canada retail sales


The Reserve Bank of New Zealand is expected to hike its benchmark rate this week, perhaps making it the first major central bank to do so since the pandemic. Such a narrative has propelled the New Zealand dollar into being the best-performing G10 currency against the US dollar so far this month, with NZDUSD having advanced by 0.8% month-to-date.

An RBNZ rate hike this week should help NZDUSD sustain its presence above the psychologically-important 0.70 level.


Across the Tasman Sea, there are growing concerns surrounding the Australian economy as it continues to battle against the Delta variant’s spread.

Even though the Reserve Bank of Australia surprised markets earlier this month by saying it will press ahead with its tapering despite the ongoing lockdowns, markets are still wary of the downside risks that the Delta variant poses to the central bank’s policy outlook. The longer the lockdowns persist in Australia, that could see the RBA lagging behind its G10 counterparts in normalizing its policy settings.

Should the RBA meeting minutes and the July unemployment rate suggest that policymakers’ seemingly hawkish tones earlier this month are unwarranted, that could heap more downward pressure on the Australian dollar.


Ultimately, any growing chasm between Australia and New Zealand may be best manifest through AUDNZD, which has been firmly entrenched in a downtrend since end-March.

A hawkish RBNZ coupled with signs that the lockdowns are hurting the Australian jobs market could translate into AUDNZD reaching its lowest levels since April 2020.


Investors and traders will also be monitoring the latest on the global economic recovery, seeing how consumers and factories in major economies fared last month.

On Monday morning, China reported lower-than-expected year-on-year growth for its July retail sales (8.5% vs. 10.9% est.) and industrial production figures (6.4% vs. 7.9% est.). Here are the market estimates for these same tier-1 economic data out of the US this week:

  • US July retail sales: -0.2% month-on-month
  • US July industrial production: 0.5% month-on-month

To be clear, markets are forecasting that the US retail sales data has cooled off from June’s stellar figures. Note also the dismal preliminary August consumer sentiment readings released this past Friday (13 August), which was at their lowest since 2011.

Still, any positive surprises in the figures due out of the world’s largest economy this week could boost risk assets as global investors take heart from the resilience of the global economic recovery that could well overshadow concerns over the Delta variant’s spread.


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