The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate strengthened by around 0.25% on Wednesday afternoon.
The ‘Aussie’ (AUD) softened considerably during the Australasian session after both domestic and Chinese data produced disappointing results. With crude and gold prices falling, and dampened market sentiment amid tensions in Greece, the Australian Dollar held losses versus many of its major peers during the European session.
The New Zealand Dollar, meanwhile, also softened as a result of dampened market sentiment. Additional ‘Kiwi’ (NZD) declination can be attributed to cooling demand for infant formula milk in China after environmentalists threatened to poison supplies.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is currently trending in the region of 1.0502.
Economic data pertaining to Australia printed disappointingly on Wednesday, causing the ‘Aussie’ to soften versus most of its major peers. Home Loans cooled by -3.5% in January, a larger declination than the market prediction of -2.0%. Investment Lending softened by -0.1% in January having registered 6.4% growth previously. Additionally, Value of Loans declined by -1.0% on the month in January.
Adding to the ‘Aussie’ depreciation was less-than-ideal data out of China. Of particular detriment to the South Pacific asset was China’s Industrial Production which grew by 6.8% on the year, well below the median market forecast of 7.7%.
With the situation in Greece nearing breaking point after they demanded World War Two Reparations from Germany, trader risk-appetite cooled significantly. As a high-yielding asset, the ‘Aussie’ suffered from a lack of demand.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate dropped to a low of 1.0469 today.
After it transpired on Tuesday that environmentalists threatened to poison infant formula milk in an attempt to protest against the use of agricultural poisons on pests such as rats; dairy prices slumped considerably. Given that New Zealand is the world’s foremost dairy exporter, the slump in prices had a detrimental effect on the ‘Kiwi’.
Wednesday has seen an extension on the New Zealand Dollar’s downtrend after demand for infant formula in China dampened considerably. ‘China has already taken steps and will demand each batch of milk powder imported from New Zealand has an official New Zealand certificate that it does not contain 1080,’ China’s General Administration of Quality Supervision, Inspection and Quarantine said in a statement on its website.
With the Reserve Bank of New Zealand (RBNZ) interest rate decision due for publication later on Wednesday, the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is likely to fluctuate.
Thursday ought to see heightened AUD/NZD volatility with key Australian labour market data due for publication.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate climbed to a high of 1.0528 today.
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