- The NZD/USD attracts some sellers around 0.5930 in the early Asian session on Thursday, lowering 0.10% in the day.
- The renewed commercial tensions between the US and China weigh on the Kiwi, Proxy of China.
- The investment issue ‘Sell America’ could undermine the US dollar and limit the fall of the torque.
The NZD/USD weakens up to about 0.5930 during the Early Asian Session on Thursday. However, the fall of the torque could be limited to the growing concerns about the tax cut and the bill of expenses of the administration of US President Donald Trump, as well as the concerns about the performance of the US economy.
The New Zealand commercial surplus shot at 1,426 million NZ $ in April from 794 million NZ $ in March, Statistics New Zealand revealed on Wednesday. This figure was better than the estimate of 500 million NZ $. However, the renewed fears on commercial tensions between the US and China weigh on the Kiwi, Proxy of China, since China is an important commercial partner of New Zealand.
The Chinese Ministry of Commerce said early Wednesday that US measures on China’s advanced chips are ‘typical of unilateral harassment and protectionism.’ Chinese authorities urged the US to immediately correct their wrong practices.
On the other hand, concerns about a growing deficit that threatens the status of America as a safe refuge exerts some sale pressure on the dollar. Republicans are still divided over the details of fiscal legislation. The president of the Chamber, Mike Johnson, said that Trump met with the House’s Republicans on Tuesday and failed to convince the dissidents of his party to support his broad draft fiscal law. The toughest Republicans continue to argue that the bill does not sufficiently cut expense.
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.
