The AUD/NZD pair is used to show the number of New Zealand dollars or NZD, that can be purchased for one Australian dollar (AUD) when dealing with Forex.
Commodity trading has a significant influence on finding out how valuable AUD and NZD are, as long as both countries possess plenty of natural resources.
Only the minority of people are aware of the fact that it is Lord Rutherford who is shown on a New Zealand one-hundred-dollar note. He managed to split the atom and find out what nuclear energy is. The country saves the memory of him, but it prohibited atomic power.
Australia takes the third position in the world speaking of gold production. It means that gold’s international value directly influences the AUD’s value. They are also responsible for the export of coal, aluminum, iron and agricultural stuff (like wool and livestock).
However, the majority of people associate Australia only with kangaroos, and the most famous association with New Zealand is a kiwi bird. But now, we know that there’s also an industrial sector and natural resources to consider. Accordingly, in the west, this currency pair has the name of kiwi kangaroo.
Although New Zealand is rich in the resources and has a well-developed agricultural sector, its most beneficial product is dairy. The agrarian products’ exports count about 24% of the country’s GDP every year. There are also fish, meat, wool, and fruit for export.
In 2010, NZD amounted to about 1.6% of everyday transactions in the Forex. AUD had the seventh position among the traded currencies. The average figure for the turnover reached 5.3% of transactions. After that, NZD started to lose its popularity, but the Australian dollar was still on the rise.
Usually, the two currencies take advantage of a robust commodity market, where the situation with the goods features of every country has an impact on building the relationship of the AUD/NZD pair.
Both currencies much depend on the situation with the US dollar and the influence of the Chinese economy because it is the most significant partner for these countries.
The discount rate of the Australian dollar compared with the New Zealand dollar is rather stable. The vibrations aren’t relevant.
The situation can be judged by taking a more in-depth look at the financial policy of New Zealand. It works the way that the country’s Central Bank manages all the finances of people and companies to deal with such economic features as inflation and rise.
The financial policy in the country is carefully ruled by the RBNZ, which means the Reserve Bank of New Zealand. They use “Official Cash Rate” to establish the dominating discount rates every half a year.
This is a discount rate at which the banks in the country can take finances from the RBNZ to process the operations from day today. The Bank has to keep inflation within the limit from 1% to 3%. For July 2019, the RBNZ hasn’t brought many changes to OCR since November 2016.
The example given demonstrates that both countries’ economies are stable enough and won’t undergo serious changes. That’s why professional traders keep growing more interested in this pair.
On the contrary, some minor exchange rate changes take place regularly. Dealing with significant capital, you can get benefit from these changes with a small risk of losing money.
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