Australian Dollar Exchange Rate Today: AUD Falls versus New Zealand Dollar (NZD) in Quiet Data Day

STORY LINK Australian Dollar Exchange Rate Today: AUD Falls versus New Zealand Dollar (NZD) in Quiet Data Day

AUD/NZD Exchange Rate Trends Lower

The Australian Dollar declined against the New Zealand Dollar on Thursday in a quiet day for Trans Tasman data. The ‘Kiwi’ has been rising against the ‘Aussie’ in recent months with some investors suggesting that the exchange rate could reach parity. After softening a little toward the end of the week, it’s a mixed debate on whether the New Zealand Dollar will actually achieve equality.

Industry expert Dan Bell stated: ‘If you look at what’s happening in the Australian economy compared to New Zealand, Australia has this headwind from a huge drop in resources and mining sector and we know that they had this massive boom. We’re seeing huge weakness in iron ore prices and a lot of the other export commodities that Australia produces, and the RBA is really trying to prepare the Australian economy for this structural change. So they want a weaker Australian Dollar, they want to encourage other export industries to pick up from there the resources and mining sector has left off.’

There were several events that took place this week that influenced the ‘Kiwi’ and the ‘Aussie’ such as highly influential Chinese data. Monday’s Chinese Trade Balance ecostat sent ripples through the market when it came in at $3.08B in March, rather than the $40.20B estimate following February’s $60.62B. Then Wednesday came, and with it, more disappointment. China’s Gross Domestic Product figure shrank from 7.3% to 7.0% on the year in quarter one showing further signs of a slowdown taking place in the economy. Any negative development in China can cause significant downward pressure on the Oceanic exchange rates as both Australia and New Zealand have strong trade links with China.

The AUD/NZD exchange rate was trading in the region of 1.0132

Iron Ore Prices Impact Demand for 'Aussie'

Furthermore, a slowdown in the industrial sector can have an extremely negative impact on the ‘Aussie’ as its largest export iron ore takes a hit in both price and demand. Wednesday also saw Chinese Industrial Production fall from 7.9% to 5.6% in March on the year, a far cry from the 7.0% forecast. However, Thursday gave the ‘Aussie’ some opportunity to recover with the Australian Consumer Inflation expectation rising from 3.2% to 3.4% in April, and the Unemployment Rate falling from a positively revised 6.2% to 6.1%.

Meanwhile, the New Zealand economy has been quiet this week with very few ecostats out for release. However, the New Zealand Business Performance of Manufacturing Index noted a decline in March when the February figure was upwardly adjusted to 56.1 and fell to 54.5.

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