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Rising Retail Sales Push Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate Higher

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AUD/NZD Exchange Rate Rises after AU Sales Data Beats Forecasts

The Australian Dollar (AUD) has risen by 0.3% against the New Zealand Dollar (NZD) today, thanks to better-than-expected retail sales data.

Levels of retail sales in April rose by 0.4%, up from March’s static 0% reading. Additionally, the actual figure exceeded expectations for a 0.2% printing.

Summing up the results, ABS Director of Quarterly Economy Wide Surveys Ben James said:

‘While industries including cafes, restaurants and takeaways [benefited] from warm weather, there were likely negative impacts for some businesses in clothing, footwear and personal accessories and department stores.’

A sceptical summary came from Kate Hickie of Capital Economics, who said:

‘With household finances still under pressure from low wage growth, rising petrol prices and a slowing housing market, we expect the annual rate of consumption growth to slow from about 3.0% in the first quarter to around 2.0% by the end of the year.’

New Zealand Dollar to Australian Dollar (NZD/AUD) Exchange Rate Drops despite Strong Overall Movement

The New Zealand Dollar (NZD) has fallen against the Australian Dollar (AUD) today, but has otherwise advanced against its regular currency peers.

This mostly positive performance comes after Friday’s ANZ Roy Morgan consumer confidence reading, which rose from 120.5 points to 121.

Support for New Zealand Dollar exchange rates has also come from the devaluation of the US Dollar (USD) in the face of another potential trade war.

US trade officials confirmed that they would be levelling tariffs against the EU, Canada and Mexico on 1st June, which led to concerns about the US facing counter-tariffs.

These fears reduced trading of the US currency, instead raising risk sentiment and demand for currencies like the NZD.

Australian Dollar to New Zealand Dollar Exchange Rate Forecast: Risk of AUD/NZD Losses on RBA Caution

The recent Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate rise could turn to losses in the near-term, after a central bank meeting on Tuesday.

Reserve Bank of Australia (RBA) policymakers will announce their decision on the interest rate; current forecasts are for no adjustment from the current 1.5%.

With that in mind, RBA officials could still trigger Australian Dollar movement if they give strong positive or negative forecasts for the Australian economy.

Slow wage growth is being blamed on a lack of RBA interest rate hikes – if officials predict accelerated earnings growth then the AUD/NZD exchange rate could rise.

On the other side of the currency pairing, the New Zealand Dollar could next be affected by Tuesday’s Global Dairy Trade price index reading.

This measures changes in global dairy prices and previously showed a rise of 1.9%.

If the reading rises again then the New Zealand Dollar could rally against the Australian Dollar; higher dairy prices would benefit national dairy exporters.

Further price growth is possible because of cattle-culling efforts by the NZ government to halt the spread of Mycoplasma bovis.