- The NZD/USD can be seen while the US dollar extends its losses in the midst of growing concerns about the US debt.
- The USA
- Half of Nzier members suggested that the RBNZ should make a 25 basic points cut at the rate on Wednesday.
The NZD/USD reaches new six months, with operations around 0.6030 during the Asian hours of Monday. The pair continues its winning streak for the second consecutive day, since the US dollar is still under pressure in the midst of growing concerns about the US debt.
The US fiscal deficit could increase even more when Trump’s “One Big Beautiful Bill” passes through the Senate. The Congress Budget Office (CBO) pointed out that the bill will increase the deficit at 3.8 billion dollars, since it would offer fiscal relief on tips and loans for cars manufactured in the US.
In addition, Trump’s bill could increase the risk that bond yields stay high longer. The highest bond yields can maintain high indebted costs for consumers, companies and governments, which increases uncertainty around the US economy.
Half of the members of the “Shadow Board”, the New Zealand Economic Research Institute (NZIER), suggested that the New Zealand Reserve Bank (RBNZ) should make a 25 basic points cut in the official cash rate (OCR) in the next statement of monetary policy on Wednesday. A member recommended a cut of 50 basic points, while several members suggested that the Central Bank maintain the OCR without changes in May.
It is widely anticipated that the RBNZ will reduce the official cash rate by 25 basic points, since inflation remains low, while growth remains a great concern. Markets expect the RBA interest rate to fall to around 3.0% or 2.75% by the end of the year.
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.
