AUD to NZD Cooling after Chinese Manufacturing Data Disappoints
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Having strengthened considerably yesterday following a hawkish statement from Reserve Bank of Australia (RBA) Governor Glenn Stevens, the Australian Dollar to New Zealand Dollar exchange rate hit 1.11; the highest rate since December 2013.
Yesterday the Australian Dollar experienced considerable gains across the board as a result of a hawkish statement from RBA Governor Glenn Stevens. In the semi-annual testimony to parliamentary members, Stevens intimated that improved confidence and fiscal reform are needed to bolster Australia’s economic standing and that simply dropping the current interest rate will not help the nation gather momentum. He argued that the economy is in the healing process and that non-mining activity is strengthening outside the mining boom.
Conversely, the New Zealand Dollar filed losses across the board yesterday as the effects of Monday’s disappointing commodity data and Tuesday’s slash of inflation expectations are yet to wear off. Second quarter New Zealand Producer Prices Inputs retracted by -1%, and Producer Prices Outputs declined by -0.5%. The data revealed a large drop in dairy prices which has had a massively detrimental effect on New Zealand’s economic standing and the strength of the ‘Kiwi’ (NZD).
The Australian Dollar to New Zealand Dollar is currently trending in the region of 1.1083.
Today has seen a slight decline in the ‘Aussie’ (AUD) to ‘Kiwi’ exchange rate after Chinese factory output registered below expectations. The Chinese Manufacturing PMI was forecast to dip fractionally from 51.7 to 51.5. The actual result, however, was a declination to 50.3; hovering just above the level of contraction.
The ‘Kiwi’ has continued its bearish run today following a drop in consumer confidence. ANZ Consumer Confidence showed a decline of -5.4% in August, and the Consumer Confidence Index fell from 132.7 to 125.5.
The New Zealand Dollar has also felt pressure from the US as Matthew Olney, writing for Future Currency Forecast, explains; ‘The ‘Kiwi’ was also under pressure as the US Dollar strengthened broadly on Tuesday as speculation increased that the Federal Reserve is edging closer to raising interest rates. A run of positive economic data releases has aided the ‘Greenback’ at the expense of commodity and emerging market currencies’.
The Australian Dollar to New Zealand Dollar has hit a low today of 1.1055.
Forecast for the Australian Dollar to New Zealand Dollar Exchange Rate
With no domestic data releases tomorrow for either of the Antipodean countries; movement is likely to be caused by foreign economic changes.
Tomorrow’s symposium in Jackson Hole, Wyoming is likely to ignite movement for all commodity-driven currencies. Given that the US enjoyed a strong set of domestic data today; a rhetoric of US interest rate hiking is likely to come to fruition which will increase demand for the US Dollar and have a negative impact on the ‘Aussie’ and the ‘Kiwi’.
The Australian Dollar to New Zealand Dollar has hit a high today of 1.1098