Signs of slowing economies in both Australia and New Zealand could lead to a further devaluation of each country’s currency. The Australian dollar appears to be set to record its fourth consecutive monthly loss against the yen while losing 3.5 percent against the U.S. dollar during August alone. New Zealand’s dollar has suffered five straight months of losses against the U.S. dollar.
Both countries derive much of their economic growth from the export of commodities but with global demand waning, so too are export sales. Should this trend continue as many expect, it is likely both currencies will continue to weaken in the coming months.