- The NZD/USD gains strength to around 0.6035 in the Asian session on Monday, with an increase of 0.50% in the day.
- The inflation of the China CPI fell for the fourth consecutive month in May.
- Chinese officials are expected to meet with the US commercial negotiation team in London later on Monday to resume commercial conversations.
The NZD/USD PAR attracts some buyers around 0.6035 during Monday’s Asian negotiation hours. The New Zealand dollar (NZD) is strengthened against the dollar after China’s inflation data. The operators will closely follow the commercial conversations between the US and China later on Monday.
The data published by the National Statistics Office of China on Monday showed that the country’s consumer price index (CPI) decreased 0.1% year -on -year in May, compared to -0.1% observed in April. This figure exceeded market expectations of -0.2%.
In monthly terms, Chinese CPI inflation was reduced to a 0.2% drop in May compared to the 0.1% increase in April. In addition, China’s production price index (IPP) fell 3.3% year -on -year in May, after a 2.7% decrease in April. The data were below the 3.2%market consensus.
The Kiwi remains strong in an immediate reaction after the mixed economic data of China. Attention will move to commercial conversations between the US and China. The president of the USA, Donald Trump, declared Friday that the US Secretary of the US Treasury, Scott Besent, and two other Trump administration officials are scheduled to talk to Chinese officials in London on Monday. The hope of possible commercial negotiations between the two largest economies in the world provides some support to the Kiwi, which acts as Proxy of China, since China is an important commercial partner of New Zealand.
On the other hand, the renewed demand of the US dollar due to economic data of the US stronger than expected, including May employment data, could raise the USD and act as a wind against for the torque. The US Non -Agricultural Payroll (NFP) increased by 139,000 in May, compared to the increase of 147,000. This reading exceeded the market consensus of 130,000. Federal funds aimed at a greater possibility that the US Federal Reserve (FED) maintains its stable reference interest rate to September monetary policy meetings.
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.
