- The NZD/USD can be seen as the feeling improves after the projection of S&P Global Ratings that New Zealand will be less affected by US tariffs.
- The bullish impulse persists in the actions of New Zealand, promoted by internal recovery signals after the departure of the country from the recession in the fourth quarter of 2024.
- The governor of the Federal Reserve, Adriana Kugler, reaffirmed that Fed’s interest rates policy remains restrictive and is properly positioned.
The NZD/USD continues its bullish impulse for the second consecutive day, quoting around 0.5740 during Wednesday’s Asian hours. The torque is strengthened as the New Zealand dollar (NZD) gains traction, backed by the improvement of the feeling of traders after S&P Global Ratings project that New Zealand and several regional economies would be less affected by US tariffs.
In addition, optimism around possible exemptions of US tariffs provided some export -driven NZD relief. However, uncertainty persists, since the US president, Trump, supposedly considers three levels of staggered tariffs, although some sources suggest that this staggered approach is not officially in discussion.
The upward impulse in the actions of New Zealand continues, backed by internal recovery signs after the exit of the country from the recession in the fourth quarter of 2024. The government data published last week showed that the GDP grew 0.7% in the fourth quarter of December, exceeding the forecasts of analysts of 0.4% and the projection of 0.3% of the Central Bank.
The NZD could also find support for early Chinese stimulus measures, aimed at promoting consumption. The Communist Party of China and the State Council have proposed initiatives to “vigorously boost consumption” increasing salaries and relieving financial burdens, an effort that could benefit New Zealand exports given the role of China as a key trade partner.
However, the Kiwi dollar could face difficulties due to the expectations of greater monetary relief by the New Zealand Reserve Bank (RBNZ). At its February meeting, the Central Bank indicated two 25 -point basic (PBS) cuts in April and May, with a possible third in the year.
Despite the strength of the NZD, the bullish potential for the NZD/USD could be limited as the US dollar (USD) finds support in the hard line comments of the governor of the Federal Reserve, Adriana Kugler. On Tuesday, Kugler emphasized that Fed’s interest rates policy remains restrictive and well positioned. Kugler also pointed out that progress towards the 2% inflation target has slowed since last summer and described the recent increase in assets inflation as “little useful.”
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.
