Earlier this week, the currencies from the southern hemisphere rallied up the market reaching the highest position in the last five weeks. The rally was prompted by the toughening geopolitical conflict going on between Russia and Ukraine. Russia’s conflict with Ukraine reflected heavily on essential commodities, like oils and energy, last week.
On Wednesday, US Secretary of State Antony Blinken said that he believed Russia would invade Ukraine and ordered their aircraft to fly over Ukraine’s airspace. Confusion ensued in the forex market following this announcement. Not long after the news about attacks on Ukraine’s Kyiv and Donetsk, the market looks certain about a stumble for AUD and NZD.
The Australian dollar gave in 0.35% overnight to reach $0.7206. This happened right after AUD posted its best position in five weeks at $0.7284. Analysts predict that the fall could continue up until the support point at $0.7165. If you are thinking about buying on this dip, you can check out this comprehensive and thoroughly researched list of best Australian forex brokers by clicking here.
Despite commodity price hikes in RBA indexes, the Australian dollar still fell more than 3% in 2021. The Australian GDP looks strong with a 1.1% growth in business investment. The Ukraine issue relaxed the value of Australian bonds by nearly 0.80%, signalling potential new investments.
At the same time, the New Zealand dollar, too, has fallen from a five-week high in a matter of hours. The fall brought the coin to $ 0.6745, which is nearly 1% down from the $ 0.6808 peak. According to reports, the NZD might get support around $ 0.6730 and $ 0.6685 if the downwards trend continues. This happens as the debt market is still recovering from the RBNZ’s hawkish policies. You can explore New Zealand forex brokers at this dip time and start trading.
Nevertheless, the cash rate is still expecting a hike even after reaching the expected 2.50%. Currently, at 2.74%, the rate could reach 3% by 2023, according to Jarod Kerr from Kiwibank.