The Australian Dollar is considered a major currency, while the New Zealand Dollar (also known as the Kiwi Dollar) is not. The pair that the two currencies form is therefore not a major, nor a commodity one, despite the fact that the AUD is indeed the currency of a commodity-focused economy.
First introduced in 1966, the AUD was initially pegged to the GBP. It came as a replacement for the Australian Pound. Taken off the said peg in 1971, in 1983 it became a floating currency. Given the stability of the Australian political system and the economy, the value of the AUD has managed to stay consistently just below that of the USD.
Australia’s commodity export-based economy has always exposed the AUD to commodity-price fluctuations, but given the geographical location of the country, the currency also reflects some of the ups and downs of the major Asian economies. Indeed, Australia’s biggest trading partners are South Korea, Japan, India and China.
Though it was introduced at about the same time as the AUD (1967) the New Zealand Dollar was initially pegged to the USD. This sort of international scope has been present since, and though its economy is closely entwined with that of its larger neighbor, the NZD is considered more “international” to this day than the AUD.
As such, the NZD is more exposed to the international financial markets. The fluctuation of international interest rates for instance is a major factor to consider in regards to the value of the NZD.
Though -stemming from their geographical and cultural proximity – the two countries are each-other’s major trading partners, their economies are somewhat unexpectedly disparate. Besides being more international in scope, the NZD is mostly exposed to the agricultural and food markets, while the AUD – as said above – is under the influence of the commodity markets.
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