- The NZD/USD ranges within the negotiation range of Thursday around 0.6000 while investors seek clarity about tensions between the USA and Iran.
- The White House pointed out Thursday that he has no plans to attack Iran in the next few days.
- The PBOC kept its LPR for a year and five years stable at its current levels.
The NZD/USD pair is quoted in a limited range near the psychological level of 0.6000 during the European negotiation hours on Friday. The Kiwi pair is consolidated while investors seek clarity about the next action of the United States (USA) regarding Iran.
On Thursday, the White House comments indicated that Washington has no plans to get directly involved in the Israel-Iran war and decide about it in the next two weeks. This has increased appetite for the risk of investors, which could increase the demand for risky assets, such as the New Zealand dollar (NZD).
Apparently, the demand for safe US dollar shelter (USD) has decreased, which has led to the US dollar index (DXY) to go down to 98.60 from the weekly maximum of 99.15 registered on Thursday.
Meanwhile, the Popular Bank of China (PBOC) has maintained its interest rates without changes, as expected, at the monetary policy meeting made earlier in the day. The PBOC maintained the preferential loan rate (LPR) at one year and five years at 3.00% and 3.50%, respectively. The PBOC indicated that it is committed to liquidity injections instead of additional rate cuts to protect the net margins of banks, Reuters reported.
PBOC’s monetary policy decisions significantly impact the New Zealand dollar, since the New Zealand economy (NZ) depends largely on its exports to China.
The NZD/USD ranges well within Thursday’s negotiation range, displaying a volatility contraction. The Kiwi pair wobbles around the 20 -day exponential (EMA) mobile average about 0.6003, indicating a lateral trend.
The 14-day relative force (RSI) index oscillates within the range of 40.00-60.00, suggesting indecision among investors.
The Kiwi PAR is expected to rise towards the minimum of September 11, 0.6100 and the maximum of October 9, 0.6145 if it manages to break above the maximum of June 19, 0.6040.
In an alternative scenario, a downward movement below the minimum of May 12, 0.5846 will expose it to the round level of 0.5800, followed by the maximum of April 10, 0.5767.
GRAPH DIARY NZD/USD
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.
