Australian Dollar to NZ Dollar Forecast: AUD/NZD Exchange Rate Gains despite Positive NZ Credit Card Spending

November 23, 2014 - Written by Frank Davies

STORY LINK Australian Dollar to NZ Dollar Forecast: AUD/NZD Exchange Rate Gains despite Positive NZ Credit Card Spending

The Australian Dollar to New Zealand Dollar exchange rate (AUD/NZD) has advanced despite favourable Credit Card Spending figures from New Zealand.

On the month, spending increased by 1.3% in October after September’s 0.2% growth.

On an annual basis the figure edged higher to 6.7% from 4.5%. The New Zealand Dollar did reclaim some ground against other majors however as its recent weakness made it attractive to investors.

The commodity currency has fallen by 11% since July with dropping dairy prices being the primary catalyst for the declination. Dairy prices crashed by nearly 50% since February.

The latest Fronterra auction saw a further decline in prices which softened the NZ Dollar.

Trader Michael Johnston commented: ‘The Fronterra auction was disappointing once again so that took a bit of the steam out of the ‘Kiwi’. The US Dollar has strengthened against the Yen and so that strength has permeated elsewhere, helping to pull down the ‘Kiwi’.’

Latest Forex Rates Today:

The Australian Dollar to Canadian Dollar exchange rate converts at 1 AUD is 0.97405 CAD.
The Australian Dollar to Euro exchange rate is 1 AUD equals 0.69984 EUR.
The Australian Dollar to Pound Sterling conversion rate is 0.55381 AUD/GBP.
The Australian Dollar to New Zealand Dollar exchange rate converts at 1 AUD is 1.09975 NZD.
The Australian Dollar to US Dollar exchange rate converts at 1 AUD is 0.86700 USD.

RBA Claims Australian Dollar (AUD) Exchange Rate will Fall

The Australian Dollar had its own issues this week when Reserve Bank of Australia (RBA) Governor Glenn Stevens stated that the Australian Dollar was overvalued and faced decline against other majors such as the US Dollar (USD).

The RBA claims that the higher ‘Aussie’ is hindering the Australian economic recovery and a lower currency would benefit the nation’s growth.

Markets initially reacted by selling off the ‘Aussie’, forcing the Australian commodity currency lower, but Westpac has since responded by saying that it disagreed with the central bank’s statements.

Westpac has the reputation of being the most accurate economic forecaster within the nation and therefore its opinion carries serious weight.

Strategist Sean Callow stated: ‘The failure of US yields to rise in response to decent economic data does raise more serious questions about whether the US Dollar is primed for a sustained rally, particularly against high yielding currencies such as the ‘Aussie’. Over the next few months the ‘Aussie’ will trend higher against the US Dollar.’

However, RBA policymakers are extremely concerned that the ‘Aussie’ remains stubbornly high while commodity values fall. Iron ore prices have tumbled in recent months yet the Australian Dollar has remained surprisingly buoyant. That being said, forecasts that we are now at the end of the Iron Ore Boom have circulated recently and could impact the Australian Dollar.

Aus dollar to NZ Dollar Exchange Rate Forecast: Data to Impact AUD/NZD

In the coming week, the AUD/NZD exchange rate could move following the Reserve Bank of New Zealand’s (RBNZ) Two-Year Inflation Expectation on Tuesday, followed by Westpac’s Consumer Sentiment survey on Wednesday.

New Zealand’s Trade Balance is also out on Wednesday. Australian New Home Sales figures are released on Thursday as well as Private Capital Expenditure and New Zealand’s Building Permits.

Friday will close the week with New Zealand’s ANZ Activity Outlook, Business Confidence, and Australian Private Sector Credit.

Any Chinese data that prints positively could also impact the AUD/NZD exchange rate.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Currency Predictions Daily Cur Forecasts