Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Forecast: ‘Aussie’ Weakens with Chinese Stock Turmoil

  • Posted on

Twenty Zealand Cents

As the Chinese Yuan (CNY) hit a five-year low on Wednesday the Australian Dollar (AUD) has slumped across the board due to decreasing risk sentiment.

New Zealand Dollar (NZD) Softened as Dairy Prices Falter at Opening Auction of 2016

Both the ‘Aussie’ (AUD) and the ‘Kiwi’ (NZD) have been dented as a result of trader risk aversion this week, following the turmoil of Monday’s Chinese stock market plunge. However, as Tuesday saw Beijing intervene to prop up the Shanghai Composite Index the commodity-correlated currencies were given some measure of reprieve. Pundits remained more cautious towards the New Zealand Dollar ahead of the day’s GlobalDairyTrade auction and their concerns were soon confirmed as the price of milk solids retreated in the first session of 2016. As this does not seem to bode well for outlook of the New Zealand dairy industry, and with speculation that the Reserve Bank of New Zealand (RBNZ) may be prompted to cut interest rates further in the coming year, the AUD/NZD exchange rate trended higher during the day’s European session.

Demand for the Australian Dollar soon took a downturn, however, as domestic Services PMI proved distinctly disappointing. Dropping from 48.2 to 46.3 this discouraging result showed that the sector had ended the year by edging further into contraction territory, undermining any impressions of a stronger Australian economy.

Australian Dollar (AUD) Exchange Rate Dragged Down as Chinese Yuan (CNY) Hits Five-Year Low

Hot on the heels of this unimpressive Australian data the latest Chinese Services PMI was found to have slowed significantly in December, sliding from 51.2 to 50.2. With sector growth minimal China’s ambitions of moving towards a more service-orientated economy appeared to take a blow, equally stoking fears of an intensifying global slowdown. Jittery pundits were further spooked as the Yuan (CNY) hit a new five-year low, prompting the antipodean currency to slump sharply across the board during Wednesday’s European session.

AUD/NZD Exchange Rate Forecast: Narrowed Australian Trade Deficit Predicted to Boost ‘Aussie’ Demand

The upcoming Federal Open Market Committee (FOMC) meeting minutes are likely to provoke additional movement for the AUD/NZD exchange rate, as if policymakers are found to have been more hawkish than previously thought the odds of a second rate hike in the near term will increase. Should the Fed seem more hesitant, though, the commodity-correlated currencies are likely to benefit from any resultant US Dollar (USD) weakness.

An ‘Aussie’ rally could also be on the cards on Thursday if the November Australian Trade Balance shows a decreased trade deficit as forecast, shoring up faith in the domestic economy. Nevertheless, any further volatility in global stock markets is likely to have the greater impact on the AUD/NZD exchange rate ahead of the weekend.

Current AUD, NZD Exchange Rates

At time of writing, the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate was trending lower at 1.0650, while the New Zealand Dollar to Australian Dollar (NZD/AUD) pairing was making gains in the region of 0.9384.

« Previous Story

Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Forecast: Declining Chances of Imminent Fed Hike Bolster AUD

Next Story »

Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Forecast: ‘Aussie’ Down Today on Fears for the Future

Disclaimer: and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.