The Australian Dollar has continued to capitalise on political concerns in New Zealand today, rising by 0.3% against the New Zealand Dollar.
Concerns about AU Housing Supply Fail to Prevent AUD NZD Advance
This has been highlighted by the Australian Dollar rising by 0.3% against the New Zealand Dollar, but falling by -0.3% against the US Dollar and Chinese Yuan.
A recent destabilising influence has been a statement from Michele Bullock, Assistant Governor at the Reserve Bank of Australia (RBA).
Looking the effects of a possible surge of properties in Brisbane, Bullock said;
‘The current stock is due to increase by 25% in the next two years. That’s an awful lot of apartments to come into Brisbane.
What you’re already seeing in fact, is rents and prices declining. So we’re a little bit concerned this supply is going to cause issues’.
Any significant change in housing supply has the chance of causing fluctuations, so the Australian Dollar could find itself weakened if the housing market reacts negatively to such a development.
New Zealand Dollar Trades Down on Uncertainty about Labour Leadership
The New Zealand Dollar continues to be impacted by Thursday’s news today, having seen continued losses against all its currency peers.
Yesterday, it was announced that New Zealand First leader Winston Peters had chosen to form a coalition with the Labour Party, instead of the defending Nationals.
This led to the New Zealand Dollar plummeting, due to the country having gotten used to a National government since 2008.
Traders are still coming to terms with the idea of a Labour-NZ First leadership, but there have already been voiced concerns about migration.
There have been fears that Labour’s campaign pledges, along with NZ First’s desires, might lead to a sharp reduction in immigration to the country, potentially reducing the flow of skilled overseas workers.
Apart from the high-profile political news, the only other NZ-based information has been the release of credit card spending data for September.
On the month, a rise in card spending took place, while a minor slowdown was reported for the year-on-year reading.
Australian Dollar could Rise on Upcoming Inflation Rate Data
The next Australian economic news to watch out for will come on Wednesday morning, consisting of inflation rate figures for the third quarter.
During the period, forecasts are for higher inflation for the quarter-on-quarter and year-on-year readings.
Rising inflation would put pressure on the Reserve Bank of Australia (RBA) to consider higher interest rates, but would need to be accompanied by higher wage growth as well.
If inflation does increase significantly, the Australian Dollar could appreciate against the New Zealand Dollar.
Next week’s main NZ news will be Thursday’s trade balance announcement.
This is tipped to show a significant deficit reduction, which might be enough to strengthen the NZD.
Recent Interbank AUD NZD Exchange Rates
At the time of writing, the Australian Dollar to New Zealand Dollar (AUD NZD) exchange rate was trading at 1.1228 and the New Zealand Dollar to Australian Dollar (NZD AUD) exchange rate was trading at 0.8903.