Australian dollar buoyed by improved manufacturing and services PMIs
Philip McHugh March 29th 2021 - < 1 minute read
As March’s Australian manufacturing and services PMIs both demonstrated solid growth, this gave the Australian dollar room to strengthen.
Worries over the health of the Australian economy naturally diminished in the wake of the PMIs, which encouraged the odds of a stronger first quarter growth rate.
Meanwhile, the New Zealand dollar fell sharply last week after the New Zealand government moved to cool the housing market, which reduced the likelihood that the Reserve Bank of New Zealand (RBNZ) will need to raise interest rates soon.
However, the New Zealand dollar recovered some of its lost ground as February’s balance of trade returned to a state of surplus.
Even so, as general market sentiment remained muted, this kept both antipodean currencies under a degree of pressure.
However, with investors expecting to see the latest New Zealand consumer and business confidence indexes weaken, NZD exchange rates look vulnerable to fresh selling pressure.
Demand for the Australian dollar could also weaken if February’s trade balance shows a narrowed surplus.
As long as doubts over the resilience of the global economy linger, this may keep both AUD and NZD exchange rates on a weaker footing.