AUD/NZD pares gains on downbeat NZ GDP data, Aussie Employment data eyed

• AUD/NZD has reversed its intraday gains and has tumbled again to near 1.1150.
• The quarterly and annual GDP have landed at -0.2% and 1.2% respectively.
• This week, investors’ focus will remain on the aussie employment data.

The AUD/NZD pair has pared most of its gains recorded on the release of the downbeat Gross Domestic Product (GDP) data by Statistics New Zealand. A country’s GDP data states its overall economic growth and possess significant importance. The GDP has tumbled to 1.2%, significantly lower than the estimates of 3.3% and the prior print of 3.1%on an annual basis. More adverse, the quarterly figures have shifted to negative territory. The quarterly GDP has landed at -0.2%, much lower than the consensus and the former figure of 0.6% and 3% respectively.

A vulnerable performance by the kiwi economy on the economic growth front has weakened the kiwi dollar against aussie. The cross has confidently overstepped 1.1165 and is expected to extend further considering the upside momentum.

On the aussie front, investors are awaiting the release of the labor market data due in the Asian session. The Australian Bureau of Statistics is expected to report a significant improvement in the employment generation opportunities program. As per the market estimates, the Australian economy has added 25k in May, principally higher than the 4k job additions reported earlier. Also, the Unemployment Rate is expected to reduce to 3.8% from the prior print of 3.9%.

An upbeat employment data will delight the Reserve Bank of Australia (RBA) to tighten its policy further without much fear of a slowdown in employment opportunities. It is worth noting that the RBA elevated its Official Cash Rate (OCR) by 50 basis points (bps) in the first week of June and more rate hikes are expected going forward.