Australian Dollar Reels against New Zealand Dollar after RBA Leaves OCR on Ice
The Australian Dollar has tumbled against the New Zealand Dollar, following a less-than-inspiring statement from the Reserve Bank of Australia (RBA).

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RBA’s Failure to Hint at OCR Rise Drags Australian Dollar Down
The recent Australian Dollar slump has primarily been triggered by July’s RBA interest rate decision. The actual decision itself met with forecasts, when policymakers once again voted to leave the Official Cash Rate (OCR) at 1.5%.
Less predictable was the RBA’s tone, which was largely the same cautious outlook of previous meetings. Economists and traders had been hoping for a little more enthusiasm from policymakers, potentially bordering on a hint of a future interest rate hike.
What they got was another textbook response from the RBA about how the economy was taking it ‘slow and steady’. The main takeaway for traders was that the RBA is now unlikely to consider raising interest rates for the near-term at the very least.
Commenting on the disappointing news was Commonwealth Bank of Australia (CBA) Senior Economist Gareth Aird;
‘I think those people in the market who are hoping or looking for the Reserve Bank to be a little more hawkish will probably be disappointed, and that’s why we’ve seen the [Australian] Dollar come off. The central banks that have gone to a slightly more hawkish stance more recently, they’re all at a different place than what the Reserve Bank [of Australia] is’.
Elsewhere, Australian retail sales rose by 0.6% in May, which was below the forecast 1% figure.
New Zealand Dollar Advances despite Continued Concerns about Construction Sector
The New Zealand Dollar has appreciated recently on rising business confidence. The minor rise in the NZIER business confidence result for Q2 has come along with underlying concerns about the construction sector.
On the latter issue, concerns are that not enough is being built due to limited construction sector take-up and high per-job prices among workers.
The latest NZ news has seen the Global Dairy Trade price index drop by -0.4%.
This has been bad news for NZ exporters, but does not seem to have damaged the NZD too heavily.
AUD NZD Forecast: Australian Dollar Rally Possible on Soaring Trade Surplus
Near-term Australian data on Wednesday and Thursday could cement the Australian Dollar’s gains against the New Zealand Dollar.
The services index for May posted 51.5 points; if June’s result on Wednesday dips under 50 points then the Australian Dollar could weaken as it would indicate contraction.
Thursday’s big news will be May’s trade balance result. This previously showed a surplus of 0.555bn in April and forecasts are for a rise to 1.1bn in May. If the surplus rises to or exceeds the predicted figure then the Australian Dollar could rally.
From New Zealand, the next data will be the ANZ commodity price measure on Wednesday. This gives an indication of overall export prices from the country. If the index rises significantly then the New Zealand Dollar could appreciate.
Outside of this news, however, the rest of the week is fairly bare for NZ data, which could leave the Australian Dollar as the dominant half of the pairing.
Recent Interbank AUD NZD Exchange Rates
At the time of writing, the Australian Dollar to New Zealand Dollar (AUD NZD) exchange rate was trading at 1.0438 and the New Zealand Dollar to Australian Dollar (NZD AUD) exchange rate was trading at 0.9577.