Further NZD exchange rate depreciation is likely in the near term, not only against the USD but also the AUD
The New Zealand Dollar exchange rate has seen a period of depreciation over the last month.
In their latest NZD currency forecasts, the team at Lloyds Bank see a further lowering of the currency against the majors:
"Moreover, with dairy prices, a key export, slumping and domestic economic conditions uncertain, further NZD depreciation is likely in the near term, not only against the USD but also the AUD."
"We see NZD/USD potentially falling below 0.60 by March 2016. Further out, as domestic economic conditions improve, we expect the NZD/USD rate to recover towards 0.70 by end-2016."
A quick foreign exchange market summary before we bring you the rest of the report:
On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The GBP to GBP exchange rate converts at 1 today.
The pound conversion rate (against australian dollar) is quoted at 1.918 AUD/GBP.
The live inter-bank GBP-USD spot rate is quoted as 1.246 today.
NB: the forex rates mentioned above, revised as of 25th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
NZD Exchange Rates Expand on Earlier Gains as Impending Credit Card Data is Supportive
Earlier gains were held by the New Zealand Dollar exchange rate against the USD, GBP and others today, which has been especially impressive given the crushingly low price of milk.
The price of this commodity has been unsupportive since Tuesday, when the overall global price of dairy products fell by -7.9%.
The NZD exchange rates maintained its advance against rivals today as the incoming Credit Card Spending figures came out supportive.
New Zealand Dollar Stages Recovery Today despite Crashing Milk Prices
The New Zealand Dollar (NZD) exchange rate has risen greatly today compared to yesterday’s downtrend that was seen.
This is considered to be due to the positive outcome of the country’s PPI figures for the third quarter, which came in with a rise from -0.3% to 1.6% for Inputs and a jump upwards from -0.2% to 1.3% with the Outputs result.
The price of milk has been thoroughly unsupportive today, falling from $15.38 to $15.33 today, the lowest price in over a fortnight.
With the price of milk being so vital to the performance of New Zealand’s economy, yesterday’s GlobalDairyTrade Auction’s overall drop in dairy prices by -7.9% has spelt nothing but misery for investors in the ‘Kiwi’.
The currency has recovered slightly compared to the prior downtrend, but still remains low as a result of this news.
The only New Zealand data releases due in the near future will be the country’s Q3 Producer Price Indexes, which have no predictions assigned to them.
As is always true of the ‘Kiwi’, the price of milk is likely to remain a dictating factor for the NZD exchange rate in the future.
GBP to NZD Conversion Rate Advances as Investors Digest BoE Speech Today
A single speech from Bank of England (BoE) Deputy Governor Ben Broadbent has been the only source of Sterling movement so far today; the Pound has risen and subsequently levelled out following the delivery in London this morning.
In the speech, Broadbent stated that the BoE’s report on the UK inflation rate was not intended to be seen as dovish, and that an interest rate hike could still take place in the coming year.
The UK October Retail Sales will be the next UK results of note; these are due to be released tomorrow morning.
Accurate forecasts could see the Pound crash in value, as at the time of writing predictions were wholly pessimistic for all contributing fields of the result.
The Pound Sterling has risen to 2.3541 against the New Zealand Dollar today while the New Zealand Dollar has fallen to 0.4250 against the Pound Sterling.
AUD-NZD Exchange Rate Slumps on Falling Index Score and Debelle Aversion
Although Australia has also had a speech from a central bank member recently, the ‘Aussie’ has failed to benefit from Guy Debelle’s recent speech in Sydney.
In his speech, Debelle made no comment on a possible interest rate hike or cut in the future, thereby neutralising the effect of his words.
The other AUD-related data hasn’t been particularly beneficial; the Conference Board Leading Index for September has remained negative at -0.1%, while the Westpac October Leading Index has come in with a mere repeat of 0.1%.
In the near-future, the Australian Dollar to New Zealand Dollar (AUD-NZD) exchange rate is likely to be affected by tomorrow’s RBA Foreign Exchange figures for October, along with a far later speech by RBA Head of Economic Analysis Dr Alexandra Heath.
The Australian Dollar has scraped a rate of 1.0984 against the New Zealand Dollar today, while the New Zealand Dollar has declined marginally to 0.9109 against the Australian Dollar.
US Dollar (USD) Exchange Rates Stabilise Today after Optimistic Comments from Fed Officials
Although the US Dollar began the day on a relatively weak footing, it has since strengthened against rivals following on from several relatively positive speeches from Fed officials.
Somewhat against the grain, William Dudley has said that he does not think major US Dollar movement will occur when the US interest rate is eventually raised, while Lorette Mester has hawkishly predicted that a 0.25% rise may be the first value of the first hike in over 5 years.
Further Fed speeches are due in the future from Fed members Jerome Powell, Daniel Tarullo and former Chair Ben Bernanke.
The US Dollar has advanced to 1.5486 against the New Zealand Dollar today while the New Zealand Dollar has slumped with a rate of 0.6459 against the US Dollar.