The New Zealand Dollar hit a 13-month high against its Australian relation Friday, after the bigger Oceanic nation suffered from weaker-than-expected economic data and forecasts.
Meanwhile, the picture for the New Zealand economy is rosy as the local economy receives a boost from the rebuilding of Christchurch. The city was severely damaged during an earthquake in 2011.
The New Zealand currency is set to make further gains as investors see the country as an appealing destination for higher yields. The New Zealand Reserve Bank is set to either increase or maintain the nation’s interest rates whilst its Australian counterpart has opted to cut rates in an effort to weaken the Australian Dollar.
“I really do think the Christchurch rebuild will lead to a rise in rates quicker than other people do,” said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland.”The Kiwi/Aussie cross is undervalued, I see it heading up towards 85 Australian Cents, although that’s not ASB’s official view.”
The ‘Kiwi’s’ rally was boosted after the Reserve Bank maintained the official cash rate at 2.5% and is likely to receive further support as the markets await a speech by Bank governor Graeme Wheeler, who is expected to play down the bank’s ability and desire to weaken the currency’s strength.
So far this month the Kiwi has strengthened by 1.1% amongst the 10 developed-nation currencies.
These exchange rates were correct as of 9:40 am
The New Zealand Dollar to Pound exchange rate is currently trading at 0.53012
The New Zealand Dollar to Euro exchange rate is currently trading at 0.61591
The New Zealand Dollar to US Dollar exchange rate is currently trading at 0.84054
The New Zealand Dollar to Australian Dollar exchange rate is currently trading at 0.81116
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