Australian & New Zealand Dollar Exchange Rates Forecast - Will Iraq Tensions Cause Share Market Losses?

June 26, 2014 - Written by John Cameron

STORY LINK Australian & New Zealand Dollar Exchange Rates Forecast - Will Iraq Tensions Cause Share Market Losses?

A negative session yesterday for global equities was not enough to stop the high-yielding Australian Dollar (currency:AUD) and New Zealand Dollar (currency:NZD) registering significant gains against the Pound Sterling (currency:GBP).

Shares markets across Europe incurred hefty losses with London’s FTSE 100 shipping 0.79% of its value on the day, while Frankfurt’s Dax closed down by a similar amount.

The pound to australian dollar exchange rate is +0.17 per cent higher at 1.80889, whilst the pound is 0.18pct lower on the day against the New Zealand Dollar exchange rate.

The move out of equities was triggered by ongoing fears that the West’s superpowers might be sucked in to a mutually destructive war with ISIS-led rebels in Iraq. Such a move would be sure to suck even more appetite for risk from the markets, eliciting a renewed flight to quality from investors.

The Aussie and Kiwi Dollars have traditionally lost support in such circumstances during recent years, with a ‘risk-off’ trading environment invariably leading to losses for currencies backed by higher interest rate economies.

However, during recent weeks some analysts have noted that bouts of risk aversion in the markets have triggered decent levels of support for the commodity-backed Dollars. The change in sentiment appears to have been driven by investors’ increased desire to hold physical safe havens during times of stress in the markets.

Short-term NZ Dollar forecast will see movement

The New Zealand unit will be offered further near-term direction tonight with the publication of last month’s domestic import / export figures.

The consensus expectation amongst analysts is for the May Trade Balance figure to print at NZD250m – anything below this and the Kiwi loses ground, potentially sending the Pound Sterling New Zealand Dollar exchange rate back above the 1.9500 threshold once more.

Chinese Industrial Profits data, also penned in for release during tonight’s Asian session, have the potential to affect the relative value of both the Aussie and Kiwi Dollars. Look for an annualised print of above 10% in order to provide the AUD and NZD with a further shunt forward.

New Zealand and Australian Dollar Exchange Rates Today - 27/06/2014

The Pound Sterling to Australian Dollar exchange rate is trading down -0.14% at 1.80711 GBP/AUD.
The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.07% at 1.93934 GBP/NZD.
The Euro to Australian Dollar exchange rate is trading up +0.06% at 1.44800 EUR/AUD.
The Euro to New Zealand Dollar exchange rate is trading up +0.13% at 1.55396 EUR/NZD.
The Australian Dollar to New Zealand Dollar exchange rate is trading up +0.07% at 1.07317 AUD/NZD.
The Australian Dollar to Euro exchange rate is trading down -0.06% at 0.69061 AUD/EUR.
The Australian Dollar to Pound Sterling exchange rate is trading up +0.14% at 0.55337 AUD/GBP.
The New Zealand Dollar to Euro exchange rate is trading down -0.13% at 0.64352 NZD/EUR.
The New Zealand Dollar to Pound Sterling exchange rate is trading up +0.07% at 0.51564 NZD/GBP.

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TAGS: American Dollar Forecasts Daily Currency Updates New Zeala Forecasts