- The NZD/USD weakens around 0.5720 in the early Asian session on Friday, lowering 0.32% in the day.
- The persistent concerns about the commercial war weigh on the New Zealand dollar.
- Investors expect the inflation data of the US PCE of February on Friday to obtain a new impulse.
The NZD/USD pair is still under sales pressure about 0.5720 during the early Asian session on Friday. The growing risks of the commercial war of US President Donald Trump exert some sale pressure on the Kiwi. The US PERSONAL CONSUMPTION EXPENSE DATA (PCE) will occupy the center of the stage later on Friday.
The operators remain nervous before the announcement of Trump reciprocal tariffs on April 2. Trump said the tariffs will probably be more “benign than reciprocal”, since the deadline of next week’s tariffs is approaching to enter several taxes. However, the uncertainty about its commercial policy could drag the New Zealand dollar (NZD) against the US dollar (USD).
Investors are prepared for the US PCE data that will be published on Friday to obtain some clues about the trajectory of future fees of fees, after the decision of the Federal Reserve (FED) last week to maintain its reference interest rate without changes. Any lower inflation signal could weigh on the dollar and help limit torque losses.
In addition, positive developments around China’s stimulus measures could boost NZD, since China is an important commercial partner of New Zealand. The Vice Prime Minister of China, Ding, declared that the official will implement more proactive macroeconomic policies this year while promoting the private sector and encourages foreign investment.
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 New Zealand economy and the policy of the Central Bank of the country. 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.
