Australian Dollar New Zealand Dollar Exchange Rate Plunges as Australian Inflation Disappoints
The Australian Dollar New Zealand Dollar exchange rate has tumbled this week on US trade fears as well as disappointing Australian ecostats, while the ‘Kiwi’ has held its ground due to New Zealand’s solid economic outlook. At the time of writing, AUD NZD trended at 1.04 after having lost over a cent throughout the week so far.
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Australian Dollar (AUD) Undermined by Disappointing CPI Results
Most of the Australian Dollar’s supportive factors have faded this week. Risk-sentiment has plunged due to the protectionist tone of US President Donald Trump’s administration as well as the US fully withdrawing from TPP discussions.
The ‘Aussie’ also plunged after Australia’s latest Consumer Price Index (CPI) figures were published during Wednesday’s Asian session.
Australian inflation was predicted to improve from 1.3% to 1.6% year-on-year but instead only improved to 1.5%. Worse yet was the quarter-on-quarter score which slumped from 0.7% to 0.5% despite being forecast to hold at 0.7%.
As a result, Reserve Bank of Australia (RBA) rate bets turned dovish and the ‘Aussie’ fell despite news of continued strong performance in commodities such as iron ore.
New Zealand Dollar (NZD) Firms as Investors Await NZ Inflation Figures
The New Zealand Dollar, on the other hand, has seen a generally strong week thus far. The currency has benefitted from a perceived uptick in the dairy industry and optimistic Chinese growth data.
News that Standard and Poor’s affirmed its New Zealand credit rating at ‘AA’ and saw the economic outlook was stable also bolstered demand for the ‘Kiwi’, despite the lack of risk-demand in markets this week.
On Wednesday following Australia’s disappointing inflation figures, investors flocked over to the New Zealand Dollar, as New Zealand’s inflation results are predicted to be comparatively impressive.
Australian Dollar New Zealand Dollar Forecast: New Zealand CPI Results Ahead
The Australian Dollar New Zealand Dollar exchange rate could continue to trend with a downside bias for the remainder of the week depending on incoming ecostats.
Thursday’s Asian session will see the publication of New Zealand’s Q4 Consumer Price Index (CPI) results. Markets expect quarterly inflation to rise from 0.2% to 0.3% and yearly inflation to surge from 0.2% to 1.2%.
If NZ inflation outperforms expectations, the New Zealand Dollar is likely to surge against the Australian Dollar and could see AUD NZD nearing its 2017 lows.
Besides the possibility of more risk-influencing shocks from the US Trump administration, that’s the most influential thing left on this week’s economic calendar. Friday’s Australian Q4 producer price figures are unlikely to cause considerable movement in the ‘Aussie’.
AUD NZD Interbank Rate
At the time of writing, the Australian Dollar New Zealand Dollar exchange rate trended in the region of 1.04 while the New Zealand Dollar Australian Dollar exchange rate traded at around 0.96.