- The NZD/USD finds some support during the Asian session while the USD bulls take a pause.
- A possible extension of the commercial truce between the US and China also acts as a tail wind for the antipoda kiwi.
- However, operators seem reluctant and choose to wait for the crucial decision of the FOMC on Wednesday.
The NZD/USD bounces pips from a minimum of one week reached during the Asian session on Tuesday and goes up to the 0.5975 region in the last hour. Cash prices, for now, seem to have broken a negative three -day streak, although any significant recovery seems elusive.
The US dollar (USD) is paused after the strong rebound of the day before a maximum of a week and a half, which turns out to be a key factor that acts as a tail wind for the NZD/USD torque. Apart from this, the last commercial optimism and a possible extension of the commercial truce between the US and China turn out to be another factor that provides some support for antipodes, including Kiwi.
Meanwhile, the fall of the USD remains limited to the growing acceptance that the Federal Reserve (FED) will maintain high interest rates due to concerns that the highest US tariffs would increase inflation. Operators could also choose to wait for the crucial FOMC decision on Wednesday before opening directional positions around the NZD/USD.
In the interim, the US economic agenda on Tuesday – which includes the publication of Jolts Employment Offers and the Conference Board Conference Conference Index – will be observed in search of some impulse later during the US session. However, the fundamental background justifies the caution for the nzd/USD bullies and the position for any significant appreciation.
New Zealand dollar – Frequently Questions
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.
