- The NZD/USD gains ground for the third consecutive day in the midst of the prevalent selling trend around USD.
- The divergent expectations between the FED and the RBNZ justify the caution of the aggressive upward operators.
- The rupture of last week above the level of 0.5700 supports the additional profits perspectives.
The NZD/USD attracts buyers for the third consecutive day on Monday and rises to a two -month peak, around the 0.5750 area during the Asian session in the middle of the prevalent selling trend around the US dollar (USD).
The feeling of global risk receives a small impulse from the last optimism led by the approach of US President Donald Trump to end the prolonged war between Russia and Ukraine. In addition to this, a delay in Trump’s reciprocal tariffs keeps the USD depressed close to its lowest level since 17 headdresses on Friday and acts as a tail wind for the NZD/USD torque.
The US dollar is even more undermined by the disappointing retail sales of the US of Friday, which fell in January for the most in almost two years. In fact, the US Census Office reported that retail sales fell 0.9% during the month reported, worse than the reduction of 0.1% expected and the 0.7% increase (reviewed from 0.4%) in December.
That said, the growing acceptance that the Federal Reserve (FED) would maintain its hard line posture amid still persistent inflation could help limit more USD losses. In addition to this, the growing probability that the New Zealand Reserve Bank (RBNZ) delivers a third cut of large rates later this month could limit the NZD/USD pair.
From a technical perspective, the breakdown of last week above the round figure of 0.5700 favors the upward operators and supports the perspectives of a new movement of short -term appreciation for cash prices. Therefore, any corrective setback could still be seen as a purchase opportunity and remain limited before the crucial RBNZ meeting on Wednesday.
New Zealand Faqs dollar
The New Zealand dollar (NZD), also known as Kiwi, is a well -known currency among investors. Its value is largely determined by the health of the neozyous economy and the policy of the country’s central bank. However, there are some peculiarities that can also make the NZD move. The evolution of the Chinese economy tends to move Kiwi because China is the largest commercial partner in New Zealand. The bad news for the Chinese economy is probably translated into less neozyous exports to the country, which will affect the economy and, therefore, its currency. Another factor that moves the NZD is the prices of dairy products, since the dairy industry is the main export of New Zealand. The high prices of dairy products boost export income, contributing positively to the economy and, therefore, to the NZD.
The New Zealand Reserve Bank (RBNZ) aspires to reach and maintain an inflation rate between 1% and 3% in the medium term, with the aim of keeping it near the midpoint of 2%. To do this, the Bank sets an adequate level of interest rates. When inflation is too high, RBNZ rises interest rates to cool the economy, but the measure will also raise bond performance, increasing the attractiveness of investors to invest in the country and thus boosting the NZD. On the contrary, lower interest rates tend to weaken the NZD. The differential type of types, or how they are or is expected to be the types in New Zealand compared to those set by the Federal Reserve of the US, can also play a key role in the NZD/USD movement.
The publication of macroeconomic data in New Zealand is key to evaluating the status of the economy and can influence the valuation of the New Zealand dollar (NZD). A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and can encourage the New Zealand reserve bank to increase interest rates, if this economic strength is accompanied by high inflation. On the contrary, if the economic data is weak, the NZD is likely to depreciate.
The New Zealand dollar (NZD) tends to strengthen during periods of appetite for risk, or when investors perceive that the general market risks are low and are optimistic about growth. This usually translates into more favorable perspectives for raw materials and the so -called “raw material currencies”, such as Kiwi. On the contrary, the NZD tends to weaken in times of turbulence in markets or economic uncertainty, since investors tend to sell the most risky assets and flee the most stable shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
