Australian Dollar (AUD) Softens Slightly After Making Good Gains Last Week

The Australian Dollar (AUD) softened slightly against the Euro (EUR), US Dollar (USD) and Canadian Dollar (CAD) yesterday, falling less than a quarter of one percent. It did however lose quite a bit of ground against the Sterling (GBP) overnight, falling by approximately 0.75% after making good gains against most of the majors last week following on from the Reserve Bank of Australia’s (RBA) decision to keep rates on hold.

Today the Australian Dollar (AUD) is likely to be influenced by the domestic data release of the NAB Business Confidence at 10:30 AEST. Chinese inflation figures in the form of the Consumer Price Index (CPI) and Producer Price Index (PPI) are also likely to impact the value of ‘Aussie’ (AUD) following the local announcement. The annualised Chinese CPI figure is forecast to increase from 0.8% to 0.9% whilst PPI is expected to remain at -4.3%.

Tomorrow the Australian economy will report on the percentage change to Home Loans and Investment Lending for the month of January. With the Reserve bank of Australia (RBA) cutting interest rates in February, we can expect this economic indicator to increase over the coming months. Chinese data pertaining to Retail Sales and Industrial Production will also be at the focal point of economists and investors tomorrow.


Australian Dollar to New Zealand (AUD/NZD) Exchange Rate Recovers After Hitting 30 Year Low

The AUD/NZD exchange rate has recovered slightly since trading at its’ lowest level since the ‘Kiwi’ (NZD) was floated in 1985 earlier this month. The short-term direction of the AUD/NZD exchange rate will be determined by two key economic events later this week, one from each economy.

The Reserve Bank of New Zealand (RBNZ) will announce their March Rate decision on Thursday. The current Official Cash Rate (OCR) in New Zealand is 3.5% and the expectation is that the governing body will keep rates on hold. Governor Wheeler has made reference that the RBNZ’s next move will be to again increase interest rates; however, considering the current global economic climate it appears unlikely that this will occur in the next couple of months.

The major release out of the Australian economy this week will occur on Thursday and is concerned with employment. The Australian Unemployment Rate is currently sitting at 6.4% and the forecast is that this will remain unchanged. Last month’s Employment Change figure resulted in a disappointing twelve thousand jobs being erased from the economy in January. The Employment Change forecast for February is for a moderate 15K jobs to have been added to economy.

Terry Finn