AUD NZD Rallies as Services Index Climbs to Highest Levels in Nearly a Decade
The Australian Dollar to New Zealand Dollar (AUD NZD) exchange rate climbed by over half a cent from its worse levels by the end of Thursday thanks to Australia’s latest Services data.
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Australian Dollar (AUD) Strengthened by Bumper Services Index
The Australian Dollar rebounded late on Thursday following a drop earlier in the day due to sliding iron ore prices.
The rally was in delayed reaction to the surge in Australia’s services index, which rocketed from 51.1 to 57.7 in December, expanding at its fastest rate since May 2007 and easing concerns after a shock fall in August.
The ‘Aussie’ was also strengthened by a rise in China’s services PMI as it climbed from 53.1 to 53.4 in December, reaching a 17-month high and helping to dispel fears that the economy of Australia’s largest trading partner is receding.
New Zealand Dollar Struggles on Dairy Price Drop
The New Zealand Dollar struggled to stabilise following AUD’s losses on Wednesday as a notable drop in prices at the latest Dairy Auction weighed heavily on the ‘Kiwi’.
Most investors had expected the 0.5% drop in prices in the pervious auction to be a simple blip in the recent string of increases at the dairy auction, however this proved to be wishful thinking as prices slumped 3.9%, causing concerns that New Zealand’s largest export had peaked.
AUD NZD Forecast: Aussie May Rise Following Trade Balance Report
The Australian Dollar may continue to show improvement on Friday with the release of Australia’s latest Trade Balance report, which is expected to show that the trade deficit narrowed from $1.54bn to $0.3bn in November thanks to strong commodity prices in the last quarter of 2016.
Meanwhile the New Zealand Dollar is likely to drop at the end of the week’s session as its lacks any data to drive it upwards.
Current Exchange Rates
At the time of writing the AUD NZD exchange rate was trending around 1.04 and the NZD AUD exchange rate was trending around 0.95