According to a top official at the International Monetary Fund the Australian and New Zealand Dollars are both overvalued by around 10%, the comments came as the G-20 gathers in Washington DC to discuss the impact on the world’s currencies from many of the world’s Central Banks ultra-loose monetary policy.
The Australian Dollar continues to trade close to historic highs against the US Dollar and a number of other currencies. The currency has been aided by the nation’s comparatively high interest rates and strong economy which has enticed foreign investors.
“The Australian Dollar is overvalued by around 10% from a medium-term point of view” said MinZhu the deputy managing director of the IMF. He added that the New Zealand Dollar is also overvalued by around the same amount.
The high interest rates have begun to have a negative impact on Australian and New Zealand exporters as their high value gives an advantage to their cheaper rivals. General Motors this month became the latest manufacturing company to shed workers in Australia, blaming the exchange rate for its decision to cut 500 jobs in the country.
In early trading the ‘Aussie’ slumped to a one-month low against the US Dollar as stocks declined worldwide and as concerns over the global economy caused demand for higher yielding assets to fall. The currency is still feeling the effects of the weak Chinese data released on Monday and looks set to weaken further as today’s data out of China looks set to show further disappointment. Despite that the currency has edged upwards as the morning progressed as demand for higher yields improved.
The ‘Kiwi’ followed its Australian relation downward as weak Chinese data weighs down on the demand for higher yielding assets.
Current AUD and NZD Exchange Rates
The Australian Dollar to Euro exchange rate is trading at 0.7918
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trading at 1.0347
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trading at 0.6737
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is trading at 1.2223
The New Zealand Dollar to Euro (NZD/EUR) exchange rate is trading at 0.6478
The New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate is trading at 0.5511
The New Zealand Dollar to US Dollar (NZD/USD) exchange rate is trading at 0.8465
The New Zealand Dollar to Australian Dollar (NZD/AUD) exchange rate is trading at 0.8180
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