Aus Dollar + NZ Dollar Forecasts 2015: AUD NZD Recovers as New Zealand Data Weighs

October 26, 2014 - Written by Frank Davies

STORY LINK Aus Dollar + NZ Dollar Forecasts 2015: AUD NZD Recovers as New Zealand Data Weighs

Currency News UK - The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate trended lower as last week came to a close. We bring you the latest AUD and NZD currency outlook, forecasts and conversions today>

However, the Aus Dollar steadily climbed higher against the NZ Dollar after both commodity currencies were bruised by New Zealand’s surprisingly low Consumer Price Index (CPI) figures on Wednesday.

The Australian Dollar to Euro conversion rate is 0.69354 AUD/EUR.
The Australian Dollar to Pound exchange rate is 1 AUD equals 0.54616 GBP.
The Australian Dollar to New Zealand Dollar exchange rate converts at 1 AUD is 1.11867 NZD.
The Aus Dollar to US Dollar exchange rate today is converting at 0.87874 AUD/USD.
The New Zealand Dollar to Aust Dollar conversion rate is 0.89392 NZD/AUD.

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New Zealand's Deficit Sees Aus to NZ Dollar Rate Gains

However, further gains in the AUD to NZD currency pair were recorded when New Zealand’s trade deficit widened further than expected on Thursday to a whopping -$1350 million in September from August’s -$489 million.

Furthermore, strong US data pushed the ‘Aussie’ lower against other major peers; however, the US Dollar (USD) may soften as Ebola panic continues after New York recorded its first case.

The diagnosis marks the fourth US citizen to contract the disease.

Friday was a quiet day for both Australian and New Zealand data and therefore the commodity currencies were likely to experience movement from global developments and reverberations from New Zealand’s performance.

New Zealand’s inflation was expected to contract from 1.6% to 1.2% on Wednesday; however, the actual figure showed a bigger loss, sinking to 1.0%.

The Reserve Bank of New Zealand hiked interest rates four times in quick succession this year but with such a dip in inflationary levels, the central bank is unlikely to alter the benchmark rate for some time.

Forex strategist Ray Attrill commented: ‘The overall story in currencies is one of the NZ Dollar remaining friendless and the current G10 [Group of 10] whipping boy in a generally stronger US Dollar environment following yesterday’s very soft CPI report.’

New Zealand Dollar Experiences Tough Data Week

Furthermore, New Zealand’s bad news didn’t end there.

The NZ trade deficit added to the downward pressure placed on the commodity currency.

In the present economic climate, the price of dairy commodities have been slashed almost in half since February - one factor that damaged the trade balance.

Exports fell by 3% in the third quarter while imports rose by 4%.

The previous quarter saw exports fall by 7.5%, catalysed by a drop in milk power, cheese and butter. New Zealand imported aircraft jets totalling $459 million recently which has also helped to extend the trade deficit.

However, bad news could be ahead for the Australian Dollar.

China is Australia’s largest trading partner, with iron ore being the biggest Aussie export.

However, recent weeks have seen an increase in concerns that China’s economy is slowing.

Iron ore production in the newly appointed world’s largest economy has been decreasing since spring and mine closures have become commonplace with an output drop of 20%.

Australia and New Zealand Data to Impact Exchange Rate Forecasts

Next week will be a pretty quiet week for Australian data releases but New Zealand is only scheduled to publish several highly influential pieces.

Australian Weekly Consumer Confidence figures are out on Monday which could help the ‘Aussie’ climb higher in the AUD to NZD exchange rate.

New Zealand’s Business Confidence figures are released on Wednesday, as well as the Reserve Bank of New Zealand’s Rate Decision.

‘Kiwi’ interest rates are expected to remain at 3.50% after an aggressive rate hiking session this year.

Australian New Homes Sales could impact the Aus Dollar on Thursday and any Chinese data could offer support to both of the commodity currencies.

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