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AUD/NZD Outlook as New Zealand Trade Deficit Widens

The AUD/NZD price moved sideways after the latest trade numbers from New Zealand. The exchange rate is trading at 1.1073, which is slightly above this month’s low of 1.0955. The pair has surged by 7.7% from the lowest level in 2021.

New Zealand trade data

The AUD to NZD exchange rate is in a tight range after the latest trade numbers from New Zealand. Data showed that the country’s exports dropped from over $6.87 billion to $6.42 billion. At the same time, the country’s imports surged from over $6.68 billion to over $7.12 billion. 

This increase was primarily because of the soaring petroleum imports. Petroleum and product imports jumped by $795 million to an all-time high of over $1.2 billion. As a result, the country’s trade deficit rose sharply to over $701 million. Further data showed New Zealand’s credit card spending continued rising in June. It rose from 2.2% to 3.5%. 

The AUD/NZD pair also moved sideways as investors react to the latest decision by the Australian government to launch a review of the Reserve Bank of Australia (RBA). The RBA has been criticized for letting inflation jump sharply in the past few months. 

The headline inflation jumped above 5.1% in Q1, and analysts expect that inflation to surged in Q2. In a statement on Wednesday, the RBA governor said that the bank will continue hiking interest rates in the next meetings of the year.

AUD/NZD forecast

The daily chart shows that the AUD to NZD exchange rate has been in a strong bullish trend in the past few months. The price is trading at 1.1070, which is slightly above the important support at 1.0955. This support was at its highest level on March 29th. In addition, the pair rose above the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) has moved above the neutral point. 

Therefore, the AUD/NZD pair will likely keep rising as buyers target the YTD high of 1.1170. However, the bullish view will become invalid if the price moves below 1.100.