The Australian dollar exchange rates were favoured over their antipodean peer during last week’s trade due to forecasts denting the New Zealand dollar (NZD) appeal, but the pair fluctuated into the weekend as the Aussie dollar felt continued pressure.
Stronger Australian Building Approvals and Private Sector Credit figures helped to shore up the appeal of the Australian Dollar exchange rates (AUD) on Tuesday morning, boosting confidence in the domestic economy.
Worries over the outlook of the Reserve Bank of New Zealand (RBNZ) have been mounting ahead of next week’s policy meeting, allowing the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate to make fresh gains.
The near-future may see the US hold the deciding say over the value of the AUD and NZD.
Owing to the continued uncertainty of investors over the chances of a Fed interest rate hike, the US Dollar may continue to loom over both Australia and New Zealand’s economies.
Tomorrow afternoon will bring the US’s manufacturing PMI for April, which could end up boosting AUD and NZD if it dips and lowers the chances of a rate hike.
Latest New Zealand/Australian Dollar Exchange Rates
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The pound conversion rate (against pound) is quoted at 1 GBP/GBP.
At time of writing the pound to us dollar exchange rate is quoted at 1.239.
The live inter-bank GBP-NZD spot rate is quoted as 2.102 today.
NB: the forex rates mentioned above, revised as of 19th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Other Currency Exchange News
The AUD to NZD exchange rate briefly sank to a three-month-low of 1.0625 last week as RBA concerns continued to pressure the ‘Aussie’, but recovered to strike a new weekly high of 1.0741 in response to a new Fonterra forecast.
The pair gained around 60 pips throughout the week.
Australian Dollar (AUD) Exchange Rates Briefly Firm as US Rate Hike Bets Dip
The Australian Dollar struggled throughout the majority of last week as the currency felt ongoing pressure from Reserve Bank of Australia (RBA) rate cut bets.
The RBA maintained a relatively dovish stance following a sudden interest rate cut earlier in May, with Governor Glenn Stevens reminding markets that he was dedicated to reaching inflation targets.
However, despite this pressure the Australian Dollar strengthened slightly alongside its commodity bloc peers later in the week due to lessened demand for ‘safe-haven’ currencies.
Bets that the US Federal Reserve would hike rates in June softened despite hawkish policymakers, as investors feared economic risks in June including the possibility of Britain leaving the EU. As a result, risky currencies like the Australian Dollar and New Zealand Dollar strengthened.
Prices of oil, one of the world’s most influential commodities, also briefly surpassed a significant milestone of US$50 per barrel on Thursday before dropping back below on Friday, causing a brief surge of demand for commodity currencies.
The ‘Aussie’ was weighed down slightly on Friday by news that Australia’s most lucrative commodity, iron ore, had fallen below US$50 per tonne.
New Zealand Dollar (NZD) Exchange Rates Drop after Dovish Fonterra Forecast
AUD/NZD saw a sudden jump in strength last Wednesday after an underwhelming forecast on prices of New Zealand’s commodity, dairy, was released by dairy giant, the Fonterra Co-operative Group.
The Business Times reports;
‘Much of the pressure on the kiwi came after Fonterra raised its forecast farmgate milk payout for next season, but by less than expected, marking the third year of low payouts. "The kiwi got whacked on the somewhat gloomy forecast," said Sean Callow, a senior strategist at Westpac.’
While the ‘Kiwi’ recovered against many of its rivals soon after the forecast, the Australian Dollar was able to maintain its gain against it.
Similarly to the ‘Aussie’, the New Zealand Dollar also strengthened slightly due to decreased Fed rate cut bets on Thursday and Friday of last week.
AUD to NZD Exchange Rate Forecast: House Data and Australian GDP Due This Week
While the Australian Dollar and New Zealand Dollar reacted to Friday’s US data and Fed statements, both currencies reacted similarly and as a result the AUD/NZD exchange rate itself was little affected.
Monday sees the release of not only the HIA’s new home sales data for Australia (source), but New Zealand building permit information. Australian building permit data follows on Tuesday morning.
However, the key factor for AUD/NZD movement next week could be Wednesday’s release of key Australian Gross Domestic Product (GDP) figures.
The Australian Dollar to New Zealand Dollar exchange rate is also likely to move in regards to news on their respective commodities, iron ore and milk.