The Australian Dollar New Zealand Dollar (AUD NZD) exchange rate rose on Thursday following the Reserve Bank of New Zealand’s latest policy meeting.
New Zealand Dollar Weakened by RBNZ Meeting
The New Zealand Dollar plummeted yesterday as the RBNZ met for its first policy meeting of the year.
While the Bank voted to leave interest rates unchanged as expected, markets were dismayed over the RBNZ’s dovish prediction over future rate rises.
RBNZ’s latest forecasts now predict that the next rate hike is likely to be in 2019 at the earliest, disappointing many investors as economists previously expected that a rate hike could be possible later this year.
The more dovish tone was largely driven by concerns that growth in the country would be stifled by the rising strength of the ‘Kiwi’ as it makes exports from the commodity-based economy less attractive to buyers.
Iron Ore Prices Bolsters Australian Dollar
The Australian Dollar continued to strengthen on Thursday thanks to the resilience of the commodities market, with iron ore in particular boosting the appeal of the ‘Aussie’ as it sits close to a multi-year high.
While iron ore prices slipped slightly to $81.88 a tonne on Thursday, investors are confident that they will quickly rebound, as has been the case inprevious weeks, as speculative forces continue to run rampant on Chinese futures.
AUD NZD Forecast: RBA Statement Ahead
The AUD NZD exchange rate may climb further on Friday as the Reserve Bank of Australia makes its latest Monetary Policy Statement following the Bank’s recent rate decision.
Investors hope that the statement will indicate a more hawkish stance than previously, following the bank’s predictions the economy will see accelerated growth thanks to an uptick in resource exports and an increase in domestic consumption.
Meanwhile, investors will have to wait until Tuesday for the next piece of notable New Zealand data – which may cause the ‘Kiwi’ to slump in the meantime as traders focus on the downbeat RBNZ expectations.
Current Interbank Exchange Rates
At the time of writing the AUD NZD exchange rate was trending around 1.06 and the NZD AUD exchange rate was trending around 0.94