FX News Now: AUD/NZD Exchange Falls as ?Kiwi? Recovers Losses Despite on Soft Growth Figures

June 19, 2015 - Written by Admin

STORY LINK FX News Now: AUD/NZD Exchange Falls as ?Kiwi? Recovers Losses Despite on Soft Growth Figures

Australian Dollar (AUD) Weaker against New Zealand Dollar (NZD) Exchange Rate Today

The Australian Dollar slipped against its New Zealand counterpart on Friday as the ‘Kiwi’ attempted to recover some gains from a recent losing streak.

Soft New Zealand GDP Causes Problems for NZD Commodity Currency this Week

The New Zealand Dollar has been under some hefty pressure recently after growth data took a surprising drop. The GDP ecostat fell from 3.5% to 2.6% on the year in the first quarter rather than the 3.1% expected. The quarter itself only managed to register a 0.2% rise rather than the 0.6% estimate and the previous reading was negatively revised lower to 0.7%. After the Reserve Bank of New Zealand recently cut rates, investors began to price in another cut by the central bank on account of the softer growth figures.

Trader Michael Johnston commented: ‘The market certainly seized upon it (the GDP report) and built in the chance of another rate cut. That’s really taken a lot [of] heat out of the ‘Kiwi’.’

FX Newsflash: Trans Tasman Currencies offered Support on FOMC Dovishness, AUD, NZD Rise against GBP, USD

Additionally, the NZD exchange rate has been weakening in response to a fall in dairy prices. As New Zealand’s largest commodity, the drop in dairy values have been weighing on the NZD exchange rate. The Australian Dollar meanwhile was offered some support on account of a weaker US Dollar and a dovish US central bank. The Federal Open Market Committee stated that it would be cautious before increasing borrowing costs and made a downward adjustment to economic growth for 2015. The prospect of lower US interest rates provided a boost for the ‘Aussie’ exchange rate.

Currency strategist Ray Attrill commented: ‘A lot of the bid on volatility was more to do with pre-Fed than it was about Greece. Everyone’s obsessed with interest rate differentials, but it’s effectively US interest rates, full stop. The Fed is front and centre.’

The week ahead could give the NZD an opportunity to recover some losses with some influential data due for release. Sunday will begin with the latest NZ Consumer Confidence Index which has preciously resided at 117.4 in the first quarter. Monday will continue on with New Zealand Credit Card Spending data which had previously registered 7.1% growth in April on the year.

Next Week's AUD/NZD Outlook: FOMC Interest Rate Bets to Drive Currency Market Movement

It may be that both the AUD and NZD exchange rates remain a little higher in the near future as the Fed puts off hiking interest rates.

Rochford Capital’s Derek Mumford commented: ‘There’s been disappointment about the FOMC statement and the potential path of US rates. It looks like the pace of any future rate hikes will be very, very slow.’

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 New Zealand Dollar Forecasts Pound Austr Forecasts