- The NZD/USD loses ground as the exchange terms index (Q1) increased 1.9% intertrrimestral in New Zealand, below an expected increase of 3.1%.
- The purchasing managers index (PMI) Caixin of Manufacturing of China contracted 48.3 in May, in front of an expansion of 50.4 in April.
- The purchasing managers index (PMI) USM manufacturing ISM. It contracted 48.5 in May from 48.7 in April.
The NZD/USD goes back from a maximum of eight months of 0.6055, quoting around 0.6010 during the Asian hours on Tuesday. The torque depreciates as the New Zealand dollar (NZD) fights, possibly due to data from the softest exchange terms index than expected, which increased 1.9% inter -endral in the first quarter, compared to an increase of 3.1% in the previous quarter and below the market forecasts for a similar increase of 3.1%. Export prices increased by 7.1%, the largest increase in three years, while import prices rose 5.1%, the largest increase in 10 quarters.
In addition, the purchasing managers index (PMI) Caixin of Manufacturing of China decreased unexpectedly to 48.3 in May from the previous reading of 50.4, below the expected expansion of 50.6. However, the weekend data showed that the manufacturing PMI of the National Statistics Office (NBS) increased to 49.5 in May, from the reading of April 49.0. The NZD could be affected by Chinese economic data, since both countries are nearby commercial partners.
Last week, the subgovernor of the New Zealand Reserve Bank (RBNZ), Karen Silk, said that interest rates are now within the neutral range of 2.5% –3.5% after a 25 basic points cut. Silk also said that future policy decisions will depend on the data.
However, the NZD/USD torque could recover land as the US dollar (USD) continues to fight in the midst of growing concerns about stagflation in the United States (USA). The president of the United States, Donald Trump, threatened to double import tariffs on steel and aluminum, increasing them at 50% from 25%, with effect as of Wednesday.
The Manufacturing Purchase Managers Index (supply Institute (ISM) was reduced to 48.5 in May from 48.7 in April. This figure was weaker than the expectation of 49.5. Operators will probably observe the publication of Jolts employment offers later on Tuesday.
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.
