- The NZD/USD is quoted with a positive trend for the second consecutive day in the midst of a weaker USD.
- The reduced expectations of RBNZ rate cuts underpin the NZD and offer more support to the pair.
- Geopolitical risks could limit risk sensitive Kiwi before the crucial FOMC meeting.
The NZD/USD pair attracts some buyers at lower levels near the area of ​​0.6045 on Tuesday and brakes the late backward recoil from its highest level since October 2024. However, the rebound lacks a strong monitor of the European session.
The US dollar (USD) continues with its struggle to attract significant buyers and remains well within the reach of a minimum of three years, which, in turn, is considered a key factor that acts as a tail wind for the NZD/USD pair. Operators have been valuing the possibility that the Federal Reserve (FED) resumes its cycle of feat cuts in September in the middle of inflation relaxation signals and an economy in deceleration. This, together with the fiscal concerns of the US and the uncertainties related to the trade, keeps the USD’s boundions on the defensive.
The New Zealander (NZD) dollar, on the other hand, receives support from the national data, which showed that the food price index accelerated from 3.8% in April to 4.4% last month, marking the highest level since December 2023. The data is added to the expectations of only one more cut of fees by the Bank of the New Zealand Reserve (RBNZ) and provide additional support to the pair NZD/USD. However, operators seem reluctant to open aggressive directional positions before the risk of key events of the Central Bank.
The US Central Bank is scheduled to announce its policy decision at the end of a two -day meeting on Wednesday and is widely expected to keep the status quo in the middle of the uncertainty surrounding the commercial policies of US President Donald Trump. Therefore, the attention will focus on the accompanying policy statement and the comments of the president of the FED, Jerome Powell, during the press conference after the meeting. Investors will look for clues on the future path of features of the Fed, which will boost the USD and the NZD/USD.
Meanwhile, the operators on Tuesday will take signals of the publication of the monthly figures of US retail sales to obtain an impulse later during the first part of the US session. Meanwhile, the global risk feeling is affected by the increase in geopolitical tensions in the Middle East. This could further stop the operators of opening upward positions around the Risk -sensitive NZD and contributing to limit the NZD/USD, which remains confined in a family range maintained during the last week or so.
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.
