- The NZD/USD is strengthened about 0.5900 in the Early Asian Session on Thursday.
- The Fed kept the stable rates for the fifth time consecutive on Wednesday.
- The operators prepare for the reports of the PMI of July of the NBS of China in search of a new impulse, which will be published later on Thursday.
The NZD/USD gains strength around 0.5900, breaking the loss streak of five days during the early Asian session on Thursday. The US dollar (NZD) weakens against the New Zealand dollar (NZD) after the Federal Reserve (Fed) decided to keep the fees without changes. Later on Thursday, the Manufacturing PMI and the PMI of Services of the National Office of Statistics (NBS) of China will be at the Center for Care.
The Federal Open Market Committee (FOMC) voted 9-2 to maintain its federal reference fund rate in a range of 4.25% -4.5% at its July meeting on Wednesday. Governors Christopher Waller and Michelle Bowman voted against the decision in favor of a 25 basic points (BPS) rates.
The president of the Fed, Jerome Powell, said during the press conference that interest rates are in the right place to manage continuous uncertainty around tariffs and inflation, moderating the expectations of a rate cut in September. The markets are now valuing almost 60% probability of a reduction of Fed rates at the next September meeting, lowering around 60% earlier in the day, according to the CME Fedwatch tool.
Meanwhile, commercial optimism and a possible extension of the commercial truce between the US and China could provide some support to the New Zealand dollar (NZD), which acts as Proxy of China, in the short term, since China is an important commercial partner of New Zealand. The US Treasury Secretary, Scott Besent, said the US and China will continue the conversations about the maintenance of a tariff truce before the deadline in two weeks, and Trump will make the final decision on any extension. Besent moderated any expectation that Trump rejected the extension.
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.
