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.
Most analysts expect 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.
- We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools.
- It also didn’t help that traders turned a bit cautious today after taking risks in the last few days.
- Australia’s close export ties with China mean that any weakness in Chinese demand still affects the AUD.
- The 4-hour chart for NZD/USD shows that the pair is consolidating around the blue trendline and showing bullish momentum.
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Recently, the AUD/NZD has bitfinex review shown a slight upward trend, reflecting a recovery from previous lows. Factors such as economic data releases from Australia and New Zealand, including GDP growth and interest rate decisions, are influencing the pair’s value. Market participants are cautiously optimistic, with investor sentiment leaning towards a bullish outlook due to positive economic indicators. Opportunities for growth include potential interest rate hikes by the Reserve Bank of Australia, which could strengthen the AUD. However, risks such as geopolitical tensions and global economic uncertainties could pose challenges.
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 mercatox review 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.
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.
Business confidence has declined for three consecutive months coupled with a 22-month streak of contraction in manufacturing PMI data. The 4-hour chart for USD/JPY shows that the pair has broken above the descending broadening wedge pattern at $146.40 and initiated a move toward $151. The pair failed to break instaforex review below the pivotal $140 level, reinforcing the current upward bias.
In the short term, analysts expect the AUD/NZD rate to rise to 1.12, largely because the RBA’s hawkish-for-longer stance will boost the appeal of the Australian dollar. The New Zealand dollar has been among the weakest performing major currencies in 2023, with the persistent downtrend attributable to several key factors. The AUD has underperformed against most of its developed world peers as the Reserve Bank of Australia has lifted rates at an easier pace than other central banks, widening the differential in interest rates. The pair are correlated given the similar position of both countries as commodity exporters, and typically trade in a similar way against other global currencies. Both are also suited to “risk-on” trade, thanks to each country’s high exposure to commodities exports to China and a sensitivity to global growth. When covering investment and personal finance stories, we aim to inform our readers rather than recommend specific financial product or asset classes.
Bank of England interest rate-setters want inflation down before more cuts
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.
AUD/NZD Nears Key Resistance With RBNZ Expected to Cut Rates Further
- Market participants have started to price in 25 basis points (bps) cut by RBA, its first cut in four years after being “late” to the global interest rate cut cycle (excluding Bank of Japan) to reduce its policy cash rate to 4.1%.
- 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.
- Despite this, the AUD and NZD often display high levels of volatility against each other, offering lucrative opportunities for traders.
- As a result, USD/JPY could benefit from stronger Dollar flows and reduced regional uncertainty.
- 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.
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. In comparing various financial products and services, we are unable to compare every provider in the market so our rankings do not constitute a comprehensive review of a particular sector. While we do go to great lengths to ensure our ranking criteria matches the concerns of consumers, we cannot guarantee that every relevant feature of a financial product will be reviewed. However, Forbes Advisor Australia cannot guarantee the accuracy, completeness or timeliness of this website. Short-term moving averages, including the 10-day Simple Moving Average (SMA) and 10-day Exponential Moving Average (EMA), align with the broader buy signals, further reinforcing the pair’s current bullish stance.
Forecasting Returns: $1,000 Across Market Conditions
The Australian dollar’s performance has largely been framed against a weakening global economy and central bank action in lifting rates. The Australian (AUD) and New Zealand dollars (NZD) are two of the most-traded currencies in the global forex markets. Gold price is reversing a part of the previous rebound from weekly lows early Wednesday as sellers attempt to regain control amid optimism over potential US trade deals with some of its major trading partners. Market participants have started to price in 25 basis points (bps) cut by RBA, its first cut in four years after being “late” to the global interest rate cut cycle (excluding Bank of Japan) to reduce its policy cash rate to 4.1%. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
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.
Despite this slowdown, strong export growth of 8.1% supports global trade optimism. Australia’s close export ties with China mean that any weakness in Chinese demand still affects the AUD. The Australian Dollar has been consolidating in wide ranges against the US Dollar over the past month. The chart below shows that the Westpac Consumer Confidence Index rose to 92.1 in May. This increase reversed the previous 6.0% drop in April and marked the third rise in 2025.
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.
Australian Dollar / New Zealand Dollar
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.
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.
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.