Yesterday was an eventful day for the AUD/NZD exchange rate, due to a few reasons; one being an increase to the Global Dairy Trade index (GDT), the other as a result of New Zealand’s Current Account Balance. These releases both pushed the AUD/NZD towards the exchange rates lower support level.
The GDT index is a weighted-average price of the nine dairy products sold at auction are sampled and then compared to the previous sampling. The figure last month came in at a slight negative at -1.1%.
This month the figure came in at 2.4%, the reason why this is important is for New Zealand’s economy is that the dairy industry is one of the country’s biggest exporters. Therefore the higher the price of the various dairy products, the more profitable their exports are.
Typically if the value of a domestic currency rises, the trade and current account balance will suffer. This was the case in New Zealand, However, yesterdays Current account came in slightly better than expected; this maintained the NZD strength.
This morning, New Zealand released their quartile GDP release. The figure came in well above the market expectations of 0.7%, at 1% maintaining the level of previous releases and still considered strong growth for the small country.
Australia has exhausted all its domestic data for this week. The last data release that is expected to move the market is New Zealand’s Business Confidence Index which expected by analysts to be a relatively strong figure, however, the market will find out tomorrow at 10am AEST.