CANBERRA: A few times this quarter the Australian dollar has fluctuated on data from the nation’s largest trading partner, China. For instance, China’s service activity slumped to a 21month low in September at only 50.6. Any figure above 50.0 shows growth, a figure below denotes contraction. For contrast, August had resided at a healthier 52.7. On the flip side, China’s imports rose nicely in September to 19.5% on the year a factor that saw the Aussie climb. The Reserve Bank of Australia (RBA) has also created some currency fluctuations in the final quarter of the year. Back in October, the central bank stated it hadn’t ruled out further interest rate cuts if households needed it, and the Aussie dollar weakened in response. The Aussie has been pressured lower towards the close of the quarter as the RBA has announced it has some wage growth concerns.
The Australian dollar to New Zealand dollar hit a 17month high this quarter when New Zealand experienced a shaky election. The election not only yielded an unclear result, it also resulted in the Labour party taking power for the first time in almost 10 years, led by New Zealand’s youngest ever Prime Minister Jacinda Ardern. This political uncertainty sent not just ripples, but waves, through the market which lasted for months, creating some opportune moments for the AUD/NZD exchange rate to strengthen.
