- The NZD/USD gains ground to around 0.5770 in Friday’s Asian session.
- The Trump administration imposed new tariffs on China of 145%.
- The RBNZ maintains a considerable margin to trim interest rates even more.
The NZD/USD PAR is maintained on positive terrain about 0.5770 after reaching the maximum of 0.5800 during Friday’s Asian negotiation hours. The increase in torque is backed by the wide weakness of the US dollar (USD) amid persistent economic concerns due to the climb of tariff tensions.
On Wednesday, Trump took a turn when he announced a 90 -day break in tariffs for all countries except China. Trump said early on Thursday that China faced a tariff rate of 145%, clarifying that China also faced a pre -existing 20% ​​pre -existing tax on fentanyl. Concerns about the threat of Trump tariffs that have fueled fears of a global recession and commercial wars weaken the dollar and act as a tail wind for the pair.
On the New Zealand Front, the New Zealand Reserve Bank (RBNZ) cut its reference interest rate at 25 basic points (PBS) at its April meeting on Wednesday in the middle of a constant decrease in inflation and the weakening of internal economic conditions. Analysts anticipate that the RBNZ will make a deeper cut of 50 PBS, with the markets considering the possibility of up to 100 PBs in additional flexibility by 2025. This, in turn, could limit the potential for appreciation of the New Zealand dollar (NZD) in the short term.
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.
