Currently, the AUD/NZD appears fairly priced, with room for appreciation if economic conditions remain favorable. Investing $1,000 in AUD/NZD under different market scenarios can yield varying returns. In a Bullish Breakout scenario, a 5% price increase could result in an estimated value of ~$1,050. In a Sideways Range scenario, with a 0% change, the investment remains at ~$1,000. These scenarios highlight the importance of market conditions in determining investment outcomes.
Let’s see if AUD bulls can sneak in pips against NZD traders in the next trading sessions. New Zealand’s unemployment rate has accelerated to 5.1% in the three months through December 2024 which is almost its Covid peak of 5.2% recorded in Q3 of 2020 (see Fig 1). A slowdown in the Australian inflation trend came in faster than the RBA anticipated where the trimmed mean gauge of consumer rose 3.2% y/y in Q versus a higher consensus expectation of 3.3%. The Aussie (AUD/USD) and Kiwi (NZD/USD) have strengthened against the US dollar since 3 February when US President Trump “fired” his trade tariffs salvo against Canada, Mexico, and China. Thanks to a combo of a somewhat hawkish RBA announcement and expectations of stimulus from China, the Australian dollar popped higher across the board earlier.
Rising investor concerns about the risk to global growth have also played lexatrade review a role in the prolonged weak performance of the local currency, given the potential risk to Australia’s exports. However, global equities and other risk-assets have staged a recovery in recent months, allowing the AUD to make up some ground. This week, the Antipodean countries’ central banks will decide their respective monetary policy; Australia’s RBA on Tuesday, 18 February, and New Zealand’s RBNZ on the following day on 19 February. Another important factor would be an improvement in trade and economic conditions. While Australia is currently experiencing favourable conditions for its minerals-heavy export basket, New Zealand’s agri-focused export performance has not been as good because of lacklustre conditions in the Chinese market.
However, the 100-day and 200-day SMAs suggest a more cautious long-term outlook, reflecting underlying selling pressure that could limit further upside. From a technical standpoint, the Relative Strength Index (RSI) hovers in the 60s, reflecting neutral conditions, while the Moving Average Convergence Divergence (MACD) supports ongoing buy momentum. The Ultimate Oscillator (7, 14, 28) also remains in the 60s, adding to the stable but cautiously positive outlook. Meanwhile, the Average Directional Index (14) in the 20s signals a lack of clear directional strength, aligning with the neutral reading of the Stochastic RSI Fast (3, 3, 14, 14), which rests in the 100s.
However, AUD/USD still dropped on Monday due to the strength of the US Dollar following the trade deal between China and the United States. We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools. We’re also a community of traders that support each other on our daily trading journey.
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Forex trading involves significant risk of loss and is not suitable for all investors. The RBA made no changes to interest rates but said that further hikes cannot be ruled out. “The aggressive interest rate moves by the RBA has pushed the AUD higher against its kiwi counterpart,” said Tim Waterer, chief market analyst at forex broker, KCM Trade. To the extent any recommendations or statements of opinion or fact made in a story may constitute financial advice, they constitute general information and not personal financial advice in any form. As such, any recommendations or statements do not take into account the financial circumstances, investment objectives, tax implications, or any specific fxtm review requirements of readers.
Daily Forex News and Watchlist: AUD/NZD
- Meanwhile, the Average Directional Index (14) in the 20s signals a lack of clear directional strength, aligning with the neutral reading of the Stochastic RSI Fast (3, 3, 14, 14), which rests in the 100s.
- Rising investor concerns about the risk to global growth have also played a role in the prolonged weak performance of the local currency, given the potential risk to Australia’s exports.
- On the other hand, markets have revised their expectations for Australian rate cuts.
- Practical steps include monitoring economic data releases and adjusting positions based on market sentiment and technical signals.
- Providing access to our stories should not be construed as investment advice or a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction by Forbes Advisor Australia.
- From a technical standpoint, the Relative Strength Index (RSI) hovers in the 60s, reflecting neutral conditions, while the Moving Average Convergence Divergence (MACD) supports ongoing buy momentum.
Whether you’re a beginner or an expert, find the right partner to navigate the dynamic Forex market. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. AUD is trading the lowest against USD and CHF and is seeing the least losses against NZD and GBP. Therefore, the 2-Year and 10-Year yield spreads between Australia and New Zealand sovereign bonds are likely to steepen further and, in turn, may ignite upside pressure on the AUD/NZD cross rate.
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New Zealand will publish a quarterly inflation expectations report that, if the speculations are true, will put less pressure on the Reserve Bank of New Zealand (RBNZ) to raise its cash rates some more. However, Jerome Powell expressed concern about tariffs disrupting inflation and employment goals. His cautious tone suggested a wait-and-see policy stance, adding to the Dollar’s appeal as a safe-haven asset.
Aussie volatility kicked into high gear early in the Asian trading session, thanks to the RBA monetary policy statement and headlines suggesting more stimulus efforts from China. Despite this, the AUD and NZD often display high levels of volatility against each other, offering lucrative opportunities for traders. Markets roared back to life as the US and China hit pause on their escalating trade war, with both sides emphasizing mutual respect and dignity.
AUD/NZD Price Analysis: Pair Holds Bullish Tone Ahead of Asian Session
- One key factor determining the AUD/NZD rate over a longer term will be the inevitable end to central bank tightening globally.
- However, the 100-day and 200-day SMAs suggest a more cautious long-term outlook, reflecting underlying selling pressure that could limit further upside.
- However, global equities and other risk-assets have staged a recovery in recent months, allowing the AUD to make up some ground.
- As such, any recommendations or statements do not take into account the financial circumstances, investment objectives, tax implications, or any specific requirements of readers.
- AUD/USD and NZD/USD remain bullish despite strong volatility, while USD/JPY looks poised for further upside after breaking out of the descending broadening wedge pattern.
The markets read all that as “We’re done raising rates in the foreseeable future” and sold AUD across the board. It also didn’t help that traders turned a bit cautious today after taking risks in the last few days. Firstly, its price actions have started to trade above its 50-day moving average since 4 February.
On the other hand, markets have revised their expectations for Australian rate cuts. In addition, weaker exports and 33 consecutive months of industry contraction continue to weigh on the Australian outlook. As expected, the RBA kept interest rates on hold at 4.35% but what drew bulls out was their remarks about keeping the door open for future hikes. However, policymakers also downgraded growth and inflation forecasts for this year and the next, suggesting that they’re less hawkish this time.
The pair remains within the mid-range of its recent fluctuation, signaling a stable but cautious upward bias as traders assess broader market dynamics. Key technical indicators suggest a mixed picture, with shorter-term signals supporting the current trend while longer-term averages hint at potential headwinds. In conclusion, while the analysis provides a structured outlook on the asset’s potential price movements, it is essential to remember that financial markets are inherently unpredictable. Conducting thorough research and staying informed about market trends and economic indicators is crucial for making informed investment decisions. Just a day later, the surprise RBNZ announcement that it was done with rate hikes completely reversed the momentum. That trend was underscored after the RBA, by contrast, lifted its cash rate in Australia on June 6—and his continued to speak of a potential need for more tightening of monetary policy.
Meanwhile, the unemployment rate for Australia remained stable at 4% for its latest reading of December 2024, within the range of 4.1% to 3.7% recorded in 2024. China’s narrower trade surplus with the US, from $27.6 billion in March to $20.46 billion in April, signals some success in rebalancing global trade. As a result, USD/JPY could benefit from stronger Dollar flows and reduced regional uncertainty.
But that could change over the next six months, boosting the attractiveness of the Kiwi dollar. That variation has been evident over the last year, with the combination bouncing between 1.05 and 1.15 over that period. Despite a sharp rise in June, the AUD/NZD pair is currently trading midway through the range. Our list features brokers with competitive spreads, fast execution, and powerful platforms.
Investors should consider current market trends and technical indicators when making decisions. Practical steps include monitoring economic data releases and adjusting positions based on market sentiment and technical signals. The AUD/NZD pair is trading around the 1.09 zone ahead of the Asian session on Tuesday, reflecting a slight bullish tone with minor gains on the day.
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Most analysts expect axitrader review the Australian dollar to strengthen against the NZD over the next few months because the RBA is continuing to lift rates, or has not ruled them out, whereas the RBNZ has called an end to its rate hikes. The resulting yield differential could lift the AUD/NZD rate to 1.12 from 1.09 now. “Longer term, other central banks including the RBA will need to call a halt to the rate hiking cycle, similar to where the RBNZ is now. This would help the NZD to appreciate against other currencies on narrowing yield outlooks,” said KCM’s Waterer. An immediate reason has been the New Zealand’s central bank unexpectedly signaling in May that no further policy tightening will be needed to tame inflation, after it lifted the cash rate to a steep 5.5%. One key factor determining the AUD/NZD rate over a longer term will be the inevitable end to central bank tightening globally.
Moreover, the chart below shows the Ai Group Index, which highlights ongoing industrial weakness in April and points to soft domestic momentum. The chart below shows China’s CPI and PPI readings, which indicate slowing inflation. AUD/USD and NZD/USD remain bullish despite strong volatility, while USD/JPY looks poised for further upside after breaking out of the descending broadening wedge pattern. Perhaps the main reason for the Aussie’s climb are rumors that Chinese President Xi Jinping will push regulators to implement measures to keep the stock market supported. There has been word that authorities might convince firms to buy back more shares and that the sovereign wealth fund plans to increase ETF holdings.