The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate advanced by around 0.33% on Tuesday afternoon.
After the Reserve Bank of Australia (RBA) avoided cutting the benchmark rate, despite many predicting that they would cut by 25 basis points, the ‘Aussie’ (AUD) strengthened versus the majority of its most traded currency rivals. Positive data also aided the Australian Dollar surge.
The New Zealand Dollar, meanwhile, strengthened versus many of its major peers thanks to improved trader risk appetite as a result of rising crude prices. Positive domestic data also aided the ‘Kiwi’ (NZD) in addition to tracking ‘Aussie’ gains.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is currently trending in the region of 1.0360.
With most industry experts predicting that the RBA would cut its lending rate by 25 basis points on Tuesday, the ‘Aussie’ gained across the board after it transpired that the central bank would hold the cash rate until the next policy meeting.
Glenn Stevens, RBA governor, drew attention to ‘stronger growth in lending to investors in housing assets’, saying: ‘The Bank is working with other regulators to assess and contain risks that may arise from the housing market.’
‘The board judged that, having eased monetary policy at the previous meeting, it was appropriate to hold interest rates steady for the time being,’ he added.
In addition to the RBA holding rates, the ‘Aussie’ (AUD) appreciated thanks to a succession of positive data results. Weekly Consumer Confidence, House Prices, Commodity Price, Building Approvals, Current Account Balance and Net Exports of GDP all managed to better median market forecast figures.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate has fallen to a low of 1.0320 today.
With crude prices rising, trader risk-appetite improved which saw increased demand for high-yielding assets. As a risk-correlated currency, the ‘Kiwi’ advanced as a result. ‘Brent crude prices (are) attempting to rally on rapid week-on-week reduction in US … rig count,’ Morgan Stanley said on in a note on Tuesday.
Additional gains can be attributed to a combination of positive domestic data and tracking its South Pacific counterpart. New Zealand House Prices rose in February from 5.7% to 6.4% on the year, and the ANZ Commodity Price rose by 1.8%; eclipsing the previous figure of 1.0%.
Although there is data pertaining to both South Pacific nations later on Tuesday evening, the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is likely to hold gains. This is due to improved sentiment towards the RBA.
Wednesday is likely to see significant AUD/NZD volatility with the Australian Gross Domestic Product due for publication.
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate climbed to a high today of 1.0407.
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