- The NZD/USD attracts some buyers in the fall on Monday in the middle of a slightly weaker US dollar.
- The reduction of the Fed feature clippages could limit the deepest losses of the USD and stop cash prices.
- Uncertainties related to trade justify even more certain caution for upward operators.
The NZD/USD pair reverses an important part of its intradic losses and rises to the region of 0.5965, or returns closer to the daily peak during the first hours of the European session on Monday. However, cash prices remain confined in the widest range of Friday, justifying a certain caution for aggressive operators.
The USD begins the new week with a softer tone and is kept defensive below its highest level from June 23 following mixed signals on the federal reserve rate cuts (Fed). In fact, the governor of the Fed, Christopher Waller, supported last week the possibility of a rate cut in July. This, together with a generally positive risk tone, is considered to weaken to the safe refuge dollar and provide some support to the risk sensitive kiwi.
However, investors seem convinced that the US Central Bank will maintain the highest interest rates for longer amid the evidence that taxes on increasing imports of the Trump administration are moving to consumer prices. Apart from that, persistent concerns about the possible economic repercussions of the erratic commercial policies of US President Donald Trump should limit any significant loss of the USD and maintain a stop in the NZD/USD torque.
Therefore, it will be prudent to expect a strong shopping monitoring before positioning for an additional movement of appreciation of cash prices in the absence of any relevant economic publication that moves the market in the US on Monday. Later this week, operators will take signs of the publication of the preliminary global PMIs to take advantage of some short -term opportunities.
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.
