- The NZD/USD maintains losses after the reduction of the preferential rate of loans to one year from the Popular Bank of China to 3.00% from 3.10%.
- The operators evaluated the growing inflationary pressures in New Zealand after the data of the first quarter.
- The US dollar fought after the reduction of the US credit rating by Moody’s from AAA to AA1.
The NZD/USD drops during the Asian session on Tuesday, quoting around 0.5920 after having risen more than 0.50% in the previous session. The pair remained under pressure after the last decision on interest rates of the Popular Bank of China (PBOC).
The PBOC announced a reduction in its preferential loan rates (LPR), with the LPR at a reduced 3.10% to 3.00% year, and the five -year LPR decreased from 3.60% to 3.50%. Given the strong commercial relationship between New Zealand and China, such policy changes in China tend to have a notable impact on the New Zealand dollar (NZD).
Investors continued to digest mixed economic data from China for April. While industrial production slowed down, it still exceeded expectations. However, retail sales disappointed, increasing less than forecast. Meanwhile, in New Zealand, the operators evaluated the renewed inflationary pressures after data of the first quarter that showed the most acute increase in the prices of inputs and products in almost three years.
The market approach now moves towards the decision of the Bank of the Australian Reserve (RBA) that will be announced later in the day. It is widely expected that the RBA reduces interest rates at 25 basic points, despite the strongest job report than expected last week.
In the United States front (USA), the US dollar (USD) weakened after Moody’s’s decision to reduce the credit rating of the AA1 country. This movement reflects previous sales by Fitch in 2023 and S&P in 2011. Moody’s now projects that the Federal debt of the US will shoot at 134% of GDP by 2035, from 98% in 2023, with the budget deficit that is expected to expand to almost 9% of GDP. The reduction reflects increasing concerns about the increase in debt service costs, expanding rights spending and decreased tax revenue.
New Zealander dollar today
The lower table shows the percentage of change of the New Zealand dollar (NZD) compared to the main coins today. New Zealand dollar was the weakest currency against pound sterling.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | -0.00% | 0.00% | 0.09% | 0.20% | 0.19% | -0.02% | |
| EUR | -0.03% | -0.02% | -0.03% | 0.07% | 0.18% | 0.16% | -0.05% | |
| GBP | 0.00% | 0.02% | -0.02% | 0.08% | 0.18% | 0.20% | 0.01% | |
| JPY | 0.00% | 0.03% | 0.02% | 0.08% | 0.19% | 0.17% | 0.02% | |
| CAD | -0.09% | -0.07% | -0.08% | -0.08% | 0.11% | 0.09% | -0.08% | |
| Aud | -0.20% | -0.18% | -0.18% | -0.19% | -0.11% | -0.01% | -0.19% | |
| NZD | -0.19% | -0.16% | -0.20% | -0.17% | -0.09% | 0.01% | -0.17% | |
| CHF | 0.02% | 0.05% | -0.01% | -0.02% | 0.08% | 0.19% | 0.17% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the New Zealand dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the NZD (base)/USD (quotation).
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.
