Forecast Improves for Australian, New Zealand and Canadian Dollar Following Bank of China Action and ASEAN GDP Prediction

April 20, 2015 - Written by John Cameron

STORY LINK Forecast Improves for Australian, New Zealand and Canadian Dollar Following Bank of China Action and ASEAN GDP Prediction

The high-yielding Commodity Dollars received a boost during early trading today when the People’s Bank of China (PBoC) announced that it is cutting its Reserve Requirement Ratio.

The Chinese central bank’s decision to reduce the percentage of assets held by central banks from 19.5% to 18.5% came as a boon to the Australian Dollar (currency:AUD), New Zealand Dollar (currency:NZD) and Canadian Dollar (currency:CAD) as investors priced-in a high likelihood of increased lending from China’s retail banks to the nation’s small and medium-sized enterprises and individuals.

The measure is seen as a knee-jerk response to last week’s official data which showed that the rate of expansion of China’s economy had cooled from a year-on-year 7.3% down to 7.0% during the first three months of this year. The upshot of the announcement sent the value of the Pound Sterling (currency:GBP) against the Aussie, Kiwi and CAD sharply lower during early trading – the GBP AUD exchange rate slipped to as low as 1.9082 while the GBP NZD exchange rate dropped to a relatively lowly 1.9365 as a result.

Meanwhile, the latest World Economic Forum in Jakarta heard yesterday that the ASEAN economies are set to overtake the European Union in terms of combined output within 10-15 years. The Association of Southeast Asian Nations comprises ten nation states. Its founder members in 1967 were Indonesia, Malaysia, the Philippines, Singapore, and Thailand and these were subsequently joined by Vietnam, Brunei, Cambodia, Laos and Myanmar. The latest get-together of these nascent economic powers heard that the South East Asian bloc’s expected GDP growth rate is forecast to hit 5% in the near-term – a level which puts the euroland’s counterpart showing of 2.0% firmly in the shade.

The ASEAN outperformance is expected to continue into the medium term, meaning that total economic output from the ASEAN states will eclipse that of the eurozone by 2030. This news forced analysts to upwardly adjust their medium-to-long term predictions for the export-driven Australian Dollar, New Zealand Dollar and Canadian Dollars as a result.

Foreign Exchange Rate Today: 22/04/2015

The Australian Dollar to Canadian Dollar exchange rate today is converting +0.73 per cent higher at 0.95326 AUD/CAD.
The Australian Dollar to Euro conversion rate is +0.66 pct higher at 0.72301 AUD/EUR.
The Australian Dollar to Pound Sterling conversion rate is +0.43 pct higher at 0.51880 AUD/GBP.
The Australian Dollar to New Zealand Dollar exchange rate converts +0.34 per cent higher at 1 AUD is 1.00903 NZD.
The Australian Dollar to US Dollar exchange rate is +1.17 pct higher with a conversion rate of 1 AUD equals 0.78032 USD.

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 Canadian Dollar Forecasts Currency Predi Forecasts