A very quiet day on the markets yesterday to start the week and not a big day of announcements today either, as the markets are still digesting the US rate rise, and adding plenty of commentary about what will happen moving forward.
The AUD/USD exchange rate has been hovering and ranging in the 0.71’s for the past 24 hours, reaching a high of 0.7195 and a low of 0.7152. The AUD seems to be staying fairly steady since the rate rise, coupled with US stocks closing lower for two days in a row and further decline in the price of oil. The next round of data come from the US tonight, with the GDP figures due out at 11:30pm AEST. The figure for Q3 is expected to drop from 2.1% to 1.9% which could cause further pressure on the USD in the short term.
The AUD/USD exchange rate is trading at $0.7187 at 09:00am AEST.
Looking across the ditch and the AUD/NZD continues to slowly fall away, touching a low of $1.0590 overnight before bouncing back above the $1.06 mark this morning. Commodity prices have tilted more towards the Kiwi lately with dairy outperforming iron and coal which has given short term strength to the NZD. Sean Callow, Westpac’s Research Analyst suggests that the AUD/NZD should bounce back in the first Quarter of 2016 with potential to reach the highs of $1.10 again after our stronger November employment data has fuelled expectations that the RBA will not look at any further rate cuts in 2016.
The NZD consumer confidence was released yesterday and jumped from 106.0 last month to 110.7 which helped with sentiment towards the Kiwi. The NZD trade balance figures will be released tomorrow morning with a small improvement indicated, which again could continue to give the NZD short term gains against the AUD.
The AUD/NZD exchange rate is trading at $1.0624 at 09:00am AEST.