The Australian Dollar (AUD) has shown its first sign of decent strength this week, pushing up by approximately a full percent against the majors and minors overnight. In a week that has been relatively absent of high tier domestic data releases, the AUD succumbed to downward pressure against most of the currency board earlier in the week before pushing back up overnight.
Next week is shaping up to be similar to this week, in terms of there being very little significant Australian economic data to be released to sway to the value of the Australian Dollar. Instead, the ‘Aussie’ (AUD) is likely to move in response to the international economic indicators rather than any local releases.
Canada will be at the focal point of tonight’s economic releases, with inflation data in the form of the Consumer Price Index (CPI) being released. The annualised Canadian CPI figure is expected to remain at 0.8%, with the monthly figure for May expected to rise from the -0.1% reading last month to a positive 0.5%. Canadian Retail Sales will also be announced and the forecast result is for an unchanged figure of 0.7% growth.
Australian Dollar to New Zealand Dollar (AUD/NZD) Exchange Rate at 7 Month High
The AUD/NZD exchange rate is currently trading at the highest level it has been this year. The ‘Aussie’ (AUD) has been able to move up an incredible 12% against the ‘Kiwi’ (NZD) in the last two months alone. The positive movement in the AUD/NZD exchange rate can be mainly attributed to New Zealand Dollar weakness.
The Reserve Bank of New Zealand (RBNZ) surprise rate cut earlier in the month eliminated some of the NZD strength and New Zealand’s poor Gross Domestic Product (GDP) figure out yesterday allowed the AUD/NZD exchange rate rally to continue, pushing up to hit a 7 month high and positioning the exchange rate exceptionally close to an 18 month high.
If the ANZ Consumer Confidence figure out of New Zealand today also indicates a weaker than expected result, than we may see the AUD/NZD exchange rate trading at an 18 month high to close out this week’s trading session.