- The NZD/USD goes back around 0.6015 in the first Asian session on Friday.
- Initial applications for unemployment subsidy in the US unexpectedly fell to a minimum of seven weeks last week.
- An aggressive tariff policy and the continuous commercial restlessness undermine the New Zealand dollar.
The NZD/USD loses land about 0.6015, breaking a three -day winning streak during the first Asian session on Friday. The New Zealand dollar (NZD) weakens against the US dollar amid the continuous commercial restlessness. The operators will closely follow the US commercial holders in search of a new impulse.
The data published by the US Department of Labor (DOL) on Thursday showed that the initial applications for unemployment subsidy in the US for the week that ended on July 5 fell to 227,000, compared to 233,000 in the previous week. This figure was lower than the market consensus of 235,000. This report suggests that employers may be retaining workers and showed that there is no urgency for the Federal Reserve (Fed) to resume their interest rate cuts, which raises the US dollar (USD).
However, the new climbing of the global commercial war could weigh on more risky assets such as Kiwi. The president of the USA, Donald Trump, threatened Thursday night with a 35% tariff on the goods imported from Canada, as of August 1.
The US and China agreed a commercial framework in June that restored a fragile truce, but with many still clear details. China has until August 12 to reach an agreement with the White House. Any sign of commercial tensions between the two largest economies in the world could exert some sale pressure on the Kiwi, which acts as Proxy of China, since China is an important commercial partner of New Zealand.
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.
