AUD/NZD measures the exchange rate between the Australian Dollar (AUD) and the New Zealand Dollar (NZD). It is a popular forex cross that reflects the relationship between two neighbouring economies with strong trade links and commodity-focused exports. While both currencies are influenced by global demand for natural resources, differences in monetary policy, economic growth and export performance can create trading opportunities.
At XTB, you can trade AUD/NZD using Contracts for Difference (CFDs), allowing you to speculate on both rising and falling exchange rates.
When can AUD/NZD volatility increase?
AUD/NZD may experience increased volatility during major economic announcements and market events affecting Australia, New Zealand or global commodity markets. Market activity often increases around:
- Reserve Bank of Australia (RBA) interest rate decisions
- Reserve Bank of New Zealand (RBNZ) monetary policy announcements
- Inflation, employment and GDP releases
- Australian retail sales and trade data
- New Zealand dairy auctions and export data
- Commodity price movements
- Global market sentiment and geopolitical developments
What affects the AUD/NZD exchange rate?
Reserve Bank of Australia (RBA)
The Reserve Bank of Australia influences the Australian Dollar through interest rate decisions and monetary policy guidance. Markets closely monitor the RBA's outlook on inflation, employment and economic growth, as changes in expectations can affect demand for the Australian Dollar.
Reserve Bank of New Zealand (RBNZ)
The Reserve Bank of New Zealand manages monetary policy to support price stability and sustainable economic growth. Interest rate decisions, inflation forecasts and forward guidance can all influence the value of the New Zealand Dollar and the AUD/NZD exchange rate.
Interest Rate Differentials
Differences between Australian and New Zealand interest rates are among the primary drivers of AUD/NZD. Markets often react when investors expect one central bank to tighten or loosen monetary policy more quickly than the other.
Commodity Prices
Both Australia and New Zealand are major commodity exporters. Australia benefits from exports such as iron ore, coal and liquefied natural gas, while New Zealand is well known for dairy, meat and forestry products. Changes in global commodity demand can influence both currencies.
Economic Data
Market participants closely monitor economic indicators from both countries, including:
- Inflation (CPI)
- Gross Domestic Product (GDP)
- Employment data
- Retail sales
- Trade balance
- Business confidence
- Unexpected economic data can increase volatility in AUD/NZD.
Trade Relations and Market Sentiment
Australia and New Zealand maintain close economic and trading relationships, while both economies are influenced by demand from major trading partners across the Asia-Pacific region. Changes in global investor confidence, international trade and regional economic conditions can contribute to movements in AUD/NZD.
About the Australian and New Zealand economies
Australia has a diversified economy supported by mining, energy, financial services and international trade. Commodity exports, particularly iron ore and liquefied natural gas, play an important role in economic growth and can influence the Australian Dollar.
New Zealand has a smaller, export-oriented economy with agriculture, dairy and food production forming key sectors. Because both countries rely on international trade and commodity exports, AUD/NZD is often influenced by changing global demand and differences in economic performance.
Important macroeconomic releases
- Reserve Bank of Australia (RBA) Interest Rate Decisions
- Reserve Bank of New Zealand (RBNZ) Monetary Policy Statements
- Australian Inflation (CPI)
- New Zealand GDP Growth
- Australian Retail Sales
- New Zealand Dairy Auctions
- Employment data from both countries