Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Softens on Poor Aussie Data
Having both felt the benefit of improved trader risk sentiment following dovish Federal Reserve meeting minutes, the ‘Aussie’ (AUD) to ‘Kiwi’ (NZD) exchange rate has slumped as traders digest the less-than-ideal Australian labour market data.
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The Australian Dollar to New Zealand Dollar exchange rate is currently trending in the region of 1.1164.
‘Aussie’ appreciation has been minimal over the past month or so after the Reserve Bank of Australia expressed concerns over an overvalued Australian Dollar. Fluctuations in commodity prices and waning risk sentiment have also stymied ‘Aussie’ gains.
The ‘Kiwi’, meanwhile, struggled after the Reserve Bank of New Zealand elected to hold their interest rate for the foreseeable future. The crash in global dairy prices has also weighed heavily on the commodity-correlated South Pacific currency.
The Australian Dollar to New Zealand Dollar exchange rate has hit a low today of 1.1131.
In the aftermath of the dovish Federal Reserve policy meeting minutes, trader risk sentiment has taken a positive spin. ‘The minutes appear less hawkish than anticipated, as there was concern about the health of the Eurozone economy and the potential impact of an appreciating Dollar on both US exports and inflation,’ said Ryan Sweet of Moody’s Analytics.
Some meeting participants saw the current forward guidance as appropriate in terms of risk-management considerations, ‘which suggested that it would be prudent to err on the side of patience while awaiting further evidence of sustained progress toward the Committee’s goals’.
With improved trader risk sentiment benefitting both South Pacific currencies, the victor in the AUD/NZD exchange rate has been dictated by domestic economic data.
Having added 32,100 jobs in August, the Australian economy was anticipating a further 15,500 additional positions in September. The Employment Change data, however, indicated that a there was a huge declination of -29,700 positions which, in turn, contributed to an uptick in Unemployment from 6.0% to 6.1%.
With nothing in terms of New Zealand economic data on Thursday the Australian Dollar is likely to continue to trend lower against the ‘Kiwi’.
Forecast for the Australian Dollar to New Zealand Dollar Exchange Rate
With several economic data publications pertaining to both Australia and New Zealand due out on Friday you can expect volatility for the AUD/NZD pairing.
New Zealand data is perhaps of less consequence than that of Australia’s in terms of the provocation of wider market movement. However, the nation’s House Sales and Housing Price Index will be of interest to those invested in the ‘Kiwi’ Dollar.
For those trading in the Australian Dollar, Home Loans and Investment Lending figures have the potential to spark ‘Aussie’ movement.