- The NZD/USD collapses about 0.6000 as tensions in the Middle East have affected the demand for risk -sensitive assets.
- The RBNZ is expected to reduce its OCR at the next monetary policy meeting of the month.
- The US dollar bounces strongly as the Israel-Iran conflict drives the demand for safe refuge.
The NZD/USD torque has dropped almost 0.1% near the psychological support of 0.6000 on Friday. The Kiwi torque faces a strong mass sale as antipodes have a lower performance amid the growing tensions between Israel and Iran.
New Zealander dollar today
The lower table shows the percentage of change of the New Zealand dollar (NZD) compared to the main coins today. New Zealand dollar was the weakest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.42% | 0.34% | 0.22% | 0.13% | 0.79% | 0.94% | 0.20% | |
| EUR | -0.42% | -0.03% | -0.15% | -0.23% | 0.45% | 0.49% | -0.23% | |
| GBP | -0.34% | 0.03% | -0.18% | -0.27% | 0.40% | 0.51% | -0.18% | |
| JPY | -0.22% | 0.15% | 0.18% | -0.07% | 0.58% | 0.71% | -0.03% | |
| CAD | -0.13% | 0.23% | 0.27% | 0.07% | 0.64% | 0.83% | 0.09% | |
| Aud | -0.79% | -0.45% | -0.40% | -0.58% | -0.64% | 0.13% | -0.58% | |
| NZD | -0.94% | -0.49% | -0.51% | -0.71% | -0.83% | -0.13% | -0.71% | |
| CHF | -0.20% | 0.23% | 0.18% | 0.03% | -0.09% | 0.58% | 0.71% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the New Zealand dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the NZD (base)/USD (quotation).
Early on Friday, Israel launched a series of attacks on military and nuclear objectives in the northeastern region of Tehran, with the aim of arresting the nation of building nuclear eyes. The Israeli prime minister, Benjamin Netanyahu, declared that his military forces launched the Ascending León operation to “reverse the Iranian threat to Israel’s very survival.”
In the domestic front, the New Zealand dollar (NZD) weakens in the midst of firm expectations that the New Zealand Reserve Bank (RBNZ) will cut the interest rates again at the policy meeting in July. Until now, the RBNZ has cut its official cash (OCR) rate at 225 basic points (PBS) to 2.25% from August 2024, when its monetary expansion cycle began.
Meanwhile, tensions in the Middle East have increased the demand for safe refuge for the US dollar (USD), which has been significantly beaten this week due to uncertainty about the tariff policy of the United States (USA). The American dollar index (DXY), which follows the value of the USD compared to six main currencies, bounces about 98.30 from the new minimum of three years of 97.60 registered on Thursday.
On Wednesday, US President Donald Trump said he is prepared to send letters indicating the final trade agreement and tariff rates to those commercial partners of which Washington has not received any proposal or those who are not negotiating in good faith.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
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.
