Australian Dollar to New Zealand Dollar Exchange Rate Dips on Minor Confidence Growth
A mixed reception to Australian confidence data has left the Australian Dollar to New Zealand Dollar exchange rate (AUD/NZD) trading in a narrow range today.
The latest AU economic data has consisted of the Westpac consumer confidence index for January, which has shown a 1.8% rise in respondent confidence.
While this puts confidence levels at a four-year high, it hasn’t provoked wild optimism among AUD traders.
Taking a measured response to the data, Westpac Senior Economist Matthew Hassan said;
‘Some of the survey details suggest there’s still some lingering weakness, particularly around family finances, that is likely to see consumers still quite restrained’.
Not everyone was so cautious, however – Annette Beacher of TD Securities noted that;
‘If consumers were so indebted and cash-strapped, why did “Black Friday” sales and cell phone purchases surge?
Surely such highly discretionary expenditure would be deferred until wages growth picked up’.
If consumer confidence continues to rise over the coming months, Hassan’s theory could be disproved and the Australian Dollar could rally.
NZD/AUD Exchange Rate Tight as Traders Question NZ Government
The New Zealand Dollar has traded in a narrow range against the Australian Dollar today, at a time of scepticism among NZD traders.
A recent New Zealand Institute of Economic Research (NZIER) report on business confidence has shown a dip to a two-year low for the Q4 2017 reading.
12% of responding companies predicted unfavourable economic conditions in the future, compared to 5% who were more optimistic.
NZIER said that among the damaging factors was the fact that the longstanding National government had been replaced last year by the Labour-NZ First coalition.
These are still early days for the governing coalition, so it is possible that the business confidence reading will recover in the coming months.
Australian Dollar to New Zealand Dollar Forecast: Rising AU Employment could Push AUD Higher
This morning’s high-impact Australian economic data will cover the jobs market, specifically the unemployment rate and changes to the number of employed persons.
Estimates are for a 9k rise for the employment change, but no unemployment rate change from 5.4%.
If the number of employed persons increases by more than expected, this could lead to a surprise unemployment rate drop, along with an Australian Dollar appreciation.
From New Zealand, the next major news will be a business PMI reading on Friday morning.
This is tipped to show a minor reduction in the score for December, from 57.7 points to 57.5.
While minimal, such a dip in the reading could still lower confidence in the NZ economy, resulting in an NZD/AUD exchange rate decline.