The Australian Dollar has tumbled against its New Zealand relation, coming close to a five year low as the two Oceanic nations Central Banks adopted diverging monetary policies.
The ‘Aussie’ Dollar is trading in the region of 1.1428 against the ‘Kiwi’
The New Zealand Dollar strengthened after its Reserve Bank maintained its cash rate at 2.5% and suggested that rates will need to rise further in the future.
“It’s all about interest rate differentials between Australia and New Zealand, the market is overtly bearish on Australia and there’s no hope standing in front of it” said Tim Kelleher, head of forex sales at ASB institutional NZ.
The Bank said that it expected to keep rates on hold for the rest of the year. In comparison the markets are expecting its Australian counterpart to make one more cut to its cash rate before the end of the year.
“This does open up potentially that we could see further losses for the Australian dollar back to the all time low of $NZ1.05,” Rochford Capital’s director Thomas Averill said.
But Mr Averill said he did not expect the Australian dollar to test sub-parity with its neighbour’s currency.
“If you look at Aussie-Kiwi going back to the mid-90s, it has been in a very wide range trading between $NZ1.05 and the peak up towards $NZ1.38,” Mr Averill said.
Traders are taking bets on a 53% chance that the New Zealand Central Bank’s Governor Graeme Wheeler will raise borrowing costs to 2.75% or higher before the January 2014 policy review.
Current Exchange Australian Dollar (AUD) Rates
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9148
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6921
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5955
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1428
Current New Zealand Dollar (NZD) Exchange Rates
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8005
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.6056
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5211
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8750
(Correct as of 12:00 pm GMT)
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