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Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Gains Despite Construction Slump

December 7, 2014 - Written by David Woodsmith

The Aus Dollar to NZ Dollar Exchange Rate Outlook and Near-Term Forecasts



currency forecastsThe Australian Dollar made a small advance against the New Zealand Dollar after the release of downbeat Australian construction sector figures, with the AiG index falling from growth into contraction.

With several pieces of disappointing Australian data having emerged of late, concern over the nation’s economic strength has surfaced.

Economist Harley Dale commented: ‘Perceptions regarding Australia’s short-term economic outlook have dampened recently and today’s result will hardly buoy the prevailing mood. The rate of expansion in detached house and apartment building activity slowed in November.’

Aussie Exchange Rates Today:

The Pound to Australian Dollar exchange rate converts at 1 GBP is 1.87397 AUD.
The Euro to Aussie Dollar exchange rate today is converting at 1.47769 EUR/AUD.
The US Dollar to Australian Dollar conversion rate is 1.20285 USD/AUD.
The Canadian Dollar to Aus Dollar rate is 1.05197 CAD/AUD.
The New Zealand Dollar to Aus Dollar exchange rate converts at 1 NZD is 0.92748 AUD.

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The fall in figures places more pressure on the Reserve Bank of Australia (RBA) to revive growth after Australian Gross Domestic Product (GDP) stats faltered earlier in the week. Third quarter expansion slowed significantly to only 0.3%, far below economists’ 0.7% forecasts. Commodity prices have suffered in 2014, and commodity currencies such as the Australian and New Zealand Dollars have softened as a result. Australia’s largest commodity is iron ore, and despite a drastic tumble in values, the ‘Aussie’ has remained high. Economist Shane Oliver commented: ‘Commodity prices—iron ore, oil—they’ve come down a lot more than I or the RBA or the government would have expected, and that’s a huge change.’

Meanwhile, the New Zealand Dollar has also been softer as the falling price of dairy continues to weigh on the currency. Dairy prices, like iron ore, have tumbled by almost 50% this year, a negative development for the nation and its largest export. Furthermore, New Zealand’s farmers may face restrictions on water supplies if an El Nino weather pattern develops in the near future. Economist Doug Steel commented: ‘We are conscious that milk output will come down as we go through summer in the southern hemisphere.’

In addition, the latest Fronterra auction saw a fall in dairy prices led by wholemilk powder. Despite other areas of the dairy industry showing improvement, the average price per tonne fell by 1.1% since the previous auction.

Aus Dollar Exchange Rate Forecast for This Week



Sunday will see the release of New Zealand’s Manufacturing Activity in the third quarter, which previously contracted by -1.9%. Monday will see the release of several low-impact reports for the antipodean nations, which could see some currency movement. Australian Job Advertisements, Australian and New Zealand’s Manpower Survey and New Zealand’s Truckometer are all set for publication. More influentially perhaps will be Monday’s Card Spending figures for New Zealand.

Friday will be a heavy day for Chinese data, which could offer both the Australian and New Zealand Dollar exchange rates some support.

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