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Australian Dollar to New Zealand Dollar Exchange Rate Today: AUD/NZD Advances as Commodities Gain

January 18, 2015 - Written by Frank Davies

The Australian Dollar recorded gains against the New Zealand Dollar on Friday after commodities such as gold and copper had an upswing. Copper hit a five-year low this week on speculation that a Chinese slowdown would see demand for the commodity decline. However, the metal rose as investors and economists speculated that the drop had been overdone. Commodity expert Steve Hardcastle stated: ‘It ran too far down. The market needs to consolidate after the big fall.’ Furthermore, many economists expect copper to have a positive year in 2015, despite its rough start. Standard Bank Plc stated: ‘Copper is heading into 2015 looking much tighter than initially thought. Expected losses and disruptions are already mounting.’

However, after gold rose overnight, it took a slight decline later in Friday’s session on speculation that prices advanced too quickly. Gold has gained by +3.5% this week after the Swiss National Bank announced that it was dropping its tie between the Euro and Swiss Franc. Analyst Robin Bhar stated: ‘I think the reaction to the SNB was probably overdone, and a bit of a knee-jerk, so gold probably does need to now consolidate. It’s been hitting up against the top end of its trading range where there is resistance. I think there’ll be quite a few sellers into any further strength.’

In the week ahead, Sunday will see the release of REINZ New Zealand House Sales figures, which previously resided at 6.5% on the year in November. Tuesday is where things will begin to heat up for the Australian Dollar and New Zealand Dollar with the publication of Chinese Industrial Production, Retail Sales and Gross Domestic Product figures. Any slowdown in the Chinese economy could damage both the ‘Aussie’ and the ‘Kiwi’ as the Trans Tasman nations have strong trade relations with China. New Zealand’s Consumer Price Index is also scheduled for publication and could see the ‘Kiwi’ gain if any growth takes place. Westpac’s Australian Consumer Confidence is also scheduled for publication.

In addition, any fluctuations to iron ore or dairy prices—Australia and New Zealand’s largest exports—is likely to cause Oceanic currency movement. Dairy auctions are currently taking place every fortnight and after the price of dairy collapsed by around 50% last year, any price improvement can bolster the ‘Kiwi’. Meanwhile, iron ore also tumbled by around 50% in 2014 and if Chinese growth picks up, the price could climb slightly.

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