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Weekly roundup: Australian & New Zealand dollars suffered a hard week

currency-newsWeekly roundup: Australian & New Zealand dollars suffered a hard week
Worse-than-expected Australian inflation data softened the odds of the Reserve Bank of Australia (RBA) raising interest rates any time soon. On the quarter, consumer price growth remained steady at 0.5%, instead of edging up to 0.6% in line with forecasts. This meant year-on-year growth also accelerated less than anticipated, rising from 1.5% to 2.1%.

Meanwhile, Trump had recently criticised the impact of Canada’s dairy industry on the US, creating concerns he would soon turn on New Zealand - the world’s chief exporter of milk. New Zealand exports around 7 times the value of milk to the US that Canada does, making it a much larger target for Trump’s protectionism.

Friday’s New Zealand trade data failed to support NZD, even though it showed the first trade surplus in nine months. The value of exports increased over the value of imports to take the trade balance from a deficit of -NZ$18 million to a surplus of NZ$332 million. This was actually -NZ$40 million lower than economists had expected.

Although the week’s biggest event on the Australian economic calendar - the RBA’s latest interest rate decision - has already happened, there will still be more updates on monetary policy over the next few days to keep the Australian dollar on its toes. RBA Governor Philip Lowe is set to give a speech on Thursday, while on Friday the RBA Statement on Monetary Policy will be released.

Today will be a busy day for the New Zealand dollar; not only will the results of the latest global dairy auction show whether prices of the nation’s key export have risen or fallen, but also headline labour market data (including the unemployment rate) will be released.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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