- The NZD/USD retreated a maximum of eight months of 0.6081, registered on Thursday.
- Initial weekly unemployment requests in the US rose to 247,000, above the expected 235,000.
- The feeling of the market improved after a productive phone call between Donald Trump and Xi Jinping.
The NZD/USD is quoted around 0.6030 during Friday’s Asian hours after going back from the maximum of eight months of 0.6081, reached on Thursday. The crossing of currencies maintains losses while the US dollar (USD) gains ground, with cautious operators waiting for the upcoming non -agricultural payrolls of the United States, which is expected to have added 130,000 jobs in May, below the increase of 177,000 in April. In addition, the unemployment rate is expected to remain stable at 4.2%.
UBS economist Paul Donovan said that the uncertain economic perspective in the United States (USA) makes it difficult that the president of the Federal Reserve (Fed), Jerome Powell, decides on monetary policy. The risk of error in politics increases as Powell insists on the dependence of the data. The policy operates with a gap, and the data in real time, which are unreliable and normally a bad option.
A productive telephone call between US president, Donald Trump, and Chinese President Xi Jinping, has improved the feeling of the market. Trump said the call was productive and that he is prepared to continue negotiations on tariffs. Operators will probably observe China’s avalanche on Monday, including consumer prices, production prices and commercial data. Any change in the Chinese economy could impact the New Zealand dollar (NZD), since China and New Zealand are nearby commercial partners.
The markets now expect the New Zealand Reserve Bank (RBNZ) to maintain the stable rates at your July meeting after having made a 25 basic points cut last week. The Central Bank is expected to perform its last rate cut in the cycle in August.
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.
