The AUD/NZD pair is not heavily affected by the global economic trends or geopolitical factors not involving the two countries the currencies in the pair represent. More often, the price changes of the Australian Dollar / New Zealand Dollar are affected by factors that ha an impact on local economies. Both economies rely heavily on commodity prices, although in different sectors.
The Australian dollar is the currency of Australia and its external territories, as well as of several independent Pacific Island states. It is used as legal tender in Australia. AUD depends heavily on the price of commodities of which Australia is a major exporter, namely iron ore, coal, natural and petroleum gas, gold, and aluminium oxide. Changes in the prices of those commodities will affect the Australian dollar.
The New Zealand dollar is the currency of New Zealand and some of the Pacific Island states. NZD is called a commodity currency due to the fact that the New Zealand economy relies on its exports of raw materials and products, such as dairy, meat and wood. Any changes in prices or production of those commodities will have an impact on the price of the New Zealand dollar.
Factors affecting the AUD/NZD rate include general economic indicators, such as information on employment, inflation data, retail sales, industrial production, trade balance and the release of GDP data, as well as the central bank decisions regarding the interest rates in both countries. Political events, natural disasters and various government policies can impact the AUD/NZD exchange rate significantly.
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