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Australian Dollar New Zealand Dollar (AUD/NZD) Exchange Rate Steadies NZ Dairy Trade Index Sinks

September 4, 2019 - Written by John Cameron

AUD/NZD Exchange Rate Rangebound as GDT Index Sinks for Seventh Consecutive Month

The Australian Dollar New Zealand Dollar (AUD/NZD) exchange rate steadied at around NZ$1.069 today, despite the NZ Global Dairy Trade (GDT) Index fall to 0.4% – its seventh fall in the past eight auctions.

As a result, the New Zealand Dollar stabilised against the ‘Aussie’ after the GDT’s fall was not as bad as expected.

Robert Gibson and Amy Castleton, Dairy Analysts at NZX, commented:

‘Demand from North Asia continues to lift, with volumes sold into this region well up on the previous event… This is fairly normal for this time of year and continues to reflect good demand for milk powders into this region as New Zealand heads towards peak milk production which occurs in October.’

Today saw the publication of the ANZ commodity price figure for August, which rose from -1.4% to 0.3%.

US-China trade tensions have remained in focus NZD traders, with China and the US trade war – which is locked in a stalemate over tariffs – weighing on market confidence in the risk-averse ‘Kiwi’.

AUD/NZD Exchange Rate Flat as Australian Growth Sinks to a Decade Low

The Australian Dollar (AUD) has remained steady against the New Zealand Dollar after the Reserve Bank of Australia (RBA) held its interest rates at 1% yesterday.

Meanwhile, today saw the publication of the Australian growth figure for the second quarter, with the quarterly figure confirming consensus and increasing by 1.4% – a decade low.

The year-on-year figure, meanwhile, held at 0.5%.

Australia’s Treasurer, Josh Frydenberg, was upbeat, however, saying:

‘Today's national accounts show the Australian economy continues to grow in the face of significant headwinds, both international and domestic. It's a difficult time for global economies, with Singapore, Sweden, Germany and the United Kingdom all having negative economic growth in their June quarters.’

AUD/NZD Outlook: US-China Trade Developments to Remain in Focus

Australian Dollar investors will be looking ahead to tomorrow’s publication of Australia’s trade balance figures for April, which are expected to ease from 8,036 million to 7,400 million.

Tomorrow will also see the publication of the Australian AiG Performance of Construction Index for August. Any signs of improvement could buoy market confidence in the ‘Aussie’.

New Zealand Dollar traders, meanwhile, will be focusing on global economic developments.

The AUD/NZD exchange rate will likely remain driven by US-China trade developments, with any signs of deterioration likely weighing on the pairing.

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