Australian Dollar’s Recent Decline and Its Implications for the AUD/NZD Pair

The Australian dollar slipped back below the 71‑cent mark overnight, falling to AUD $0.7090 against the U.S. dollar. This level represents the lowest value the currency has traded at since early April 2025 and is a sharp retreat from the highs it achieved earlier this week, when it hovered above 71 cents for the first time in years.

Drivers of the AUD Drop

  • RBA Policy Outlook – The Reserve Bank of Australia’s latest decision to raise rates has already pushed the currency higher. However, market participants now anticipate a further tightening in May, a view that has tempered confidence in the dollar’s near‑term strength.
  • US Equity Weakness – A late‑day sell‑off in U.S. technology stocks weighed on the market, contributing to a broader pullback across major currency pairs.
  • Narrative Shift – Analysts note a growing perception of the United States as the dominant economic force, which may dampen demand for the AUD. Concurrently, Australia’s heavy reliance on mining exports has led some to label it an “old economy,” potentially limiting the dollar’s appeal.

While the AUD has fallen against most majors, the AUD/NZD cross remains the exception. The New Zealand dollar, which traded at NZD 1.17796 against the Australian dollar as of 11 February 2026, has benefited from a relatively stable domestic environment and robust domestic demand.

Impact on the AUD/NZD Pair

The divergence in market sentiment between the two currencies has kept the AUD/NZD rate close to its 52‑week high of NZD 1.1795 and just above the 52‑week low of NZD 1.0646 recorded on 21 April 2025. Traders are watching for:

  • RBA Rate Decisions – Any sign of further tightening could lift the AUD, tightening the spread against the NZD.
  • Commodity Prices – Australia’s exposure to commodity markets means that fluctuations in global commodity prices could quickly influence the AUD’s relative strength.
  • Domestic Policy in New Zealand – While New Zealand’s monetary policy stance remains unchanged, any unexpected fiscal or regulatory developments could shift the NZD’s trajectory.

Broader Economic Context

Beyond the currency markets, Australian and New Zealand institutions continue to report solid financial results. For instance, AMP Limited has released its FY 25 data pack, indicating a 2 % decline in revenue from ordinary activities and an 11 % drop in profit after tax attributable to shareholders. Meanwhile, the National Services Group (NSR) disclosed a strong first‑half of FY 26, recording an IFRS profit of NZD 73.7 million and an underlying earnings‑per‑share of 6.0 cents.

These corporate outcomes reinforce a narrative of resilient domestic demand, which can support the New Zealand dollar even as external pressures weigh on the Australian currency. However, investors must remain vigilant as global economic developments—particularly in the United States—continue to shape the relative performance of these two closely linked markets.