AUD/NZD Exchange Rate Forecast to Trend Narrowly on Improved Fed Rate Hike Bets

New Zealand Dollars (NZD)

Given that both antipodean assets are sensitive to US Dollar movement, improved Federal Reserve rate hike bets may see the AUD/NZD exchange rate trend narrowly over the weekend.

Australian Dollar (AUD) Exchange Rates Mixed as Market Sentiment Improves

The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate was trending within a limited range in the early hours of Saturday morning.

Despite improved market sentiment, thanks to commodity price gains and rising global shares, the Australian Dollar failed to rack up any notable gains versus its major peers. This is mostly due to vastly improved Federal Reserve rate hike bets after the most recent publication of Federal Open Market Committee (FOMC) interest rate decision minutes. These showed that policymakers had left the door open for a June rate hike.

Better-than-expected US Existing Home Sales also limited the appeal of the Oceanic currency.

With a complete absence of domestic data to drive changes today, the ‘Aussie’ (AUD) is likely to hold losses versus most of its major peers.

In the very early hours of Saturday morning the Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate was trending in the region of 1.0677.

New Zealand Dollar (NZD) Exchange Rates Also Mixed despite Positive Credit Card Spending Growth

The New Zealand Dollar was trending within a limited range versus the Australian Dollar because both assets were weighed down by improved Federal Reserve rate hike bets.

However, a very slight ‘Kiwi’ (NZD) appreciation can be linked to positive domestic data on Friday which showed Credit Card Spending eclipsed expectations in April. On the Year, April’s Credit Card Spending surged by 9.1%.

‘After pausing for breath in March, consumers threw their wallets open in April,’ said Satish Ranchhod, senior economist at Westpac Bank. ‘Helping to support spending are strong levels of tourist arrivals, which have been boosting spending in areas such as hospitality. In addition, low borrowing rates and the strength in the housing market are also providing domestic consumers with a powerful shot in the arm.’

The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate dropped to a low of 1.0670 during Friday’s European session.

AUD/NZD Exchange Rate Forecast: RBA Stevens Speech to Provoke Volatility

With a lack of highly influential domestic data pertaining to both Australia and New Zealand over the coming week, the AUD/NZD exchange rate will most likely see volatility in response to US ecostats. With that said, Reserve Bank of Australia (RBA) Governor Glenn Stevens is due to make a speech. This will likely cause significant ‘Aussie’ volatility.

US Dollar strength, market sentiment and commodity prices will be the most likely drivers of AUD/NZD movement this coming week.

The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate reached a high of 1.0708 during Friday’s European session.


Ollie relocated to Cornwall after obtaining his degree from Portsmouth University. He works with one of the UK’s largest currency brokers, studying the currency market and writing up-to-the-minute updates on market movements for a variety of publications, both in print and online. - View all posts by Ollie Carpenter

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