Australina Dollar to New Zealand Dollar Exchange Rate: AUD/NZD Relatively Static

Modified: Friday, 5 June 2015 16:53 BST - Written by David Woodsmith

STORY LINK Australina Dollar to New Zealand Dollar Exchange Rate: AUD/NZD Relatively Static

Construction Sector Remains in Contraction

The Australian Dollar remained in a tight range against the New Zealand Dollar on Friday as investors digested Aussie ecostats. The AiG Performance of Construction Index registered a rise in May from 47.0 to 47.8, but still remained below the 50.0 benchmark which denotes contraction. However, the weak ecostat is somewhat of a mystery to many amid such a large residential boom.

Economist Harley Dale commented on the situation, saying: ‘Current residential construction is very strong, with detached house building above average levels and the medium/high density sector setting fresh records. The May PCI updates for the residential sector are disappointing, but there is little in the way of discernible trend in the activity and new orders sub-indices. The immediate outlook is positive and activity is not going to drop all of a sudden.’

New Zealand Data Lacking, but Dairy Prices Fall

The weakness in the May ecostat has been accredited to the general pessimism of the companies that take part in the PCI in comparison to others in the industry that are generally more optimistic. The PCI is known as a rather dramatic index and to this day it remains a hard task to breach the 50.0 expansionary benchmark. Additionally, when the economy suffers a rough patch, the index sinks extremely low.

Meanwhile, it’s been a very quiet week for the New Zealand economy by way of domestic data, lending a lot of the ‘Kiwi’s’ movements to global developments and central bank speculation. The middle of the week brought some disappointing news with it as the latest dairy price auction saw milk prices decline for the sixth consecutive run. Moreover, Fitch credit ratings agency has stated that the softer prices of dairy, New Zealand’s largest commodity, will likely cause problems for Kiwi banks’ asset standards.

Fitch stated: ‘A second year of low milk prices will raise asset-quality pressure at New Zealand banks. The full impact will depend on how long it will take milk prices to recover, and on future interest rates and the level of the New Zealand Dollar. New Zealand’s bank’s have significant exposure to the dairy industry. Dairy farmers account for the bulk of agricultural output, and dairy loans make up nearly two-thirds if total agricultural loans while agriculture accounted for 14.5% of total banking system claims in April 2015, according to the Reserve Bank of New Zealand.’

With no further data out for either Australia or New Zealand in the rest of the day, the Oceanic currencies are likely to fluctuate on global developments.

Australian Dollar Exchange Rates Today

The Australian Dollar to Canadian Dollar exchange rate today is converting -0.96 per cent lower at 0.95137 AUD/CAD.
The Australian Dollar to Swiss Franc conversion rate is +0.1 pct higher at 0.71939 AUD/CHF.
The Australian Dollar to Euro exchange rate is +0.01 pct higher with a conversion rate of 1 AUD equals 0.68595 EUR.
The Australian Dollar to Pound Sterling exchange rate converts -0.21 per cent lower at 1 AUD is 0.49937 GBP.
The Australian Dollar to Hong Kong Dollar exchange rate converts -0.84 per cent lower at 1 AUD is 5.90865 HKD.
The Australian Dollar to Japanese Yen conversion rate is +0.07 pct higher at 95.68499 AUD/JPY.
The Australian Dollar to New Zealand Dollar conversion rate is +0.31 pct higher at 1.08190 AUD/NZD.
The Australian Dollar to US Dollar exchange rate converts -0.86 per cent lower at 1 AUD is 0.76208 USD.
The Australian Dollar to South African Rand exchange rate today is converting +0.7 per cent higher at 9.58170 AUD/ZAR.

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