The Australian and New Zealand Dollars have strengthened for the first time in days against the US Dollar as economists and technical indicators hinted that the Oceanic currencies may have been oversold in recent weeks.
Futures traders now expect the US Dollar to make further declines against its Australian relation on the belief that data shows signs that the US currency is becoming stretched against the ‘Aussie’.
The currency’s decline over the past few days came after the US Dollar was supported by speculation that the Federal Reserve may soon announce a reduction in its monetary stimulus programmes. This could change on Wednesday as investors speculate that the Fed’s Chairman, Ben Bernanke may counter the rumours. If Bernanke does refute the rumours then the ‘Aussie’ looks likely to make further gains.
“The market has just moved too quickly ahead of what the Fed is actually likely to do,” said the chief economist at Barclays Plc in Sydney. “We’re not expecting Chairman Bernanke to give any sign that tapering is going to happen soon.”
The New Zealand Dollar meanwhile strengthened after Finance Minister Bill English said that rising house prices across the nation could force the Reserve Bank to tighten lending. The Bank is looking likely to increase interest rates as it attempts to prevent the creation of a possible housing bubble, something that could end up being a threat to the New Zealand economy.
“These households heading into quite high debt to buy highly priced houses need to be aware at some stage the RBNZ will increase interest rates, particularly if the housing market keeps growing at rapid rates,” English said yesterday.
Current AUD and NZD Exchange Rates
The Australian Dollar to Euro exchange rate is trading at 0.7598
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trading at 0.9781
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is trading at 0.6435
The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate is trading at 1.2021
The New Zealand Dollar to Euro (NZD/EUR) exchange rate is trading at 0.6321
The New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate is trading at 0.5353
The New Zealand Dollar to US Dollar (NZD/USD) exchange rate is trading at 0.8137
The New Zealand Dollar to Australian Dollar (NZD/AUD) exchange rate is trading at 0.8318
(Correct as if 10:00 am GMT)
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