The exchange rate forecast for AUD to NZD indicates a cautious outlook amid recent economic developments impacting both currencies. As of the latest updates, the Australian dollar (AUD) has shown some resilience, trading at 1.1449 against the New Zealand dollar (NZD), just 0.8% above its three-month average of 1.1361. However, this performance comes with mixed signals. Analysts note that while the AUD initially benefitted from a generally positive market sentiment, those gains were tempered by disappointing factory figures from China, which suggest potential weaknesses in demand for Australian exports. This is especially significant as China is Australia's largest trading partner.
On the other hand, the NZD is experiencing pressure due to a combination of profit-taking and recent adverse economic indicators. The Reserve Bank of New Zealand's unexpected 50 basis point rate cut in October signals concerns over economic growth and further weakens the NZD. Additionally, rising unemployment rates, which have reached their highest level since 2016, and a surprise contraction of 0.9% in New Zealand's economy during the second quarter add to the negative sentiment surrounding the NZD.
Both currencies are currently influenced by broader risk appetite in the market. Economic stability in Australia could support the AUD if the global economic sentiment remains optimistic, while the NZD may struggle unless there is a notable recovery in New Zealand's economic indicators, such as improvements in employment and GDP growth. Overall, the interplay of these factors suggests that the AUD/NZD exchange rate may continue to experience fluctuations, remaining within a relatively stable range of 1.1097 to 1.1579 observed over the past three months.
