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Level 5 Economics - Australian/New Zealand Dollar

Australian/New Zealand Dollar (AUD/NZD)
Central Bank: Reserve Bank of Australia / Reserve Bank of New Zealand (RBA/RBNZ)
Current Interest Rate: http://www.rba.gov.au/ and http://www.rbnz.govt.nz/

A Popular Carry
Offering one of the highest interest rates in the major global markets, the Reserve Bank of Australia has always maintained its stance of price stability and economic strength as cornerstones of its long-term plan. Headed by the governor, the Australian bank's board is made up of six at-large-members, along with a deputy governor and a secretary of the Treasury. Jointly, they work toward an inflation target of between 2-3%, while meeting nine times throughout the year. In addition, the Reserve Bank of New Zealand looks to promote inflation targeting in the hope of maintaining a foundation for prices.

Both of these currencies have become a focus of carry traders, as the Australian and New Zealand dollars (AUD and NZD) tend to offer the highest yields of the major currencies available on most platforms. Consequently, volatility can be experienced in these pairs if a deleveraging effect takes place. Usually however, the currencies tend to trade in similar averages of 30-40 pips, like the other majors. Both currencies also maintain strong relationships with commodities, most notably gold and silver. (Read more about carry trades and the AUD in Turn To The Carry – A Different Flavor Of The Setup.)

South African Rand


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RELATED TERMS
  1. Reserve Bank Of New Zealand

    The Reserve Bank of New Zealand is New Zealand's central bank ...
  2. NZD (New Zealand Dollar)

    The currency abbreviation or currency symbol for the New Zealand ...
  3. NZD/USD (New Zealand Dollar/U.S. ...

    The abbreviation for the New Zealand dollar and U.S. dollar (NZD/USD) ...
  4. Net Interest Rate Differential

    In international markets, the difference in the interest rates ...
  5. New Zealand Stock Exchange (NZE) ...

    The securities market in New Zealand. The New Zealand Stock Exchange ...
  6. NZD

    In the currency market, this is the abbreviation for the New ...
RELATED FAQS
  1. What is the name of the currency in New Zealand?

    The New Zealand currency is known as the New Zealand dollar. The currency was decimalized in 1967, and divided into 100 parts ... Read Answer >>
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    A currency reserve is a currency that is held in large amounts by governments and other institutions as part of their foreign ... Read Answer >>
  3. How are bank reserve requirements determined and how does this affect shareholders?

    Learn how bank reserve requirements are determined and how bank reserves affect shareholders through improved bank stability ... Read Answer >>
  4. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  5. Is there a world currency? If so, what is it?

    There is no such thing as a world currency. However, since World War II, the dominant or reserve currency of the world has ... Read Answer >>
  6. Which nations' economies have reserve ratios?

    Learn more about the inconsistent imposition of depository banking reserve ratios, and why the United States stands alone ... Read Answer >>

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