AUD NZD Exchange Rate Spikes Higher, GBP EUR Exchange Rate Forecast To Climb

June 4, 2014 - Written by John Cameron

STORY LINK AUD NZD Exchange Rate Spikes Higher, GBP EUR Exchange Rate Forecast To Climb

The Australian Dollar (currency:AUD) climbed against the Pound Sterling exchange rate while the New Zealand Dollar exchange rate (currency:NZD) lost significant ground against the UK tender during yesterday’s trading session. The differing fortunes for the Southern Hemisphere tenders was illustrated by an intraday upward move of 0.50% for the Australian Dollar to New Zealand Dollar exchange rate, sending the pair up to close to the psychologically significant 1.1000 threshold.

The differing fortunes for the two Commodity Dollars was driven by a divergent reaction from market participants to a poor Chinese PMI manufacturing sector survey, published by HSBC during the early hours of yesterday morning. China remains New Zealand’s number one export market, so the tame leading indicator from the world’s second most developed economy hit the Kiwi especially hard. The New Zealand unit was already reeling following last week’s disappointing dairy price forecast from Fonterra, so the Chinese figures came as a body blow.

Meanwhile, the statement which accompanied the Reserve Bank of Australia’s policy announcement, also out early on Tuesday morning, suggested that the Antipodean nation’s policymakers feel that the domestic economy is becoming more balanced and less dependent upon shipments of raw materials to markets like China.

Looking forward, whole of eurozone Gross Domestic Product figures, penned in for release shortly, have the potential to send the Pound euro exchange rate back up towards its key level of resistance which comes at 1.2370 GBP/EUR. With investors holding euros already jittery ahead of tomorrow afternoon’s European Central Bank policy announcement, a poor GDP showing could tip the single currency over the edge. If the growth figure is followed up by an ECB interest rate cut and a eurozone version of Quantitative Easing, then look for GBP EUR to jump ahead into the 1.2400s for the first time since the January of last year.

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TAGS: American Dollar Forecasts Daily Currency Updates Euro Forecasts Eur Forecasts