- The NZD/USD gains strength about 0.6105 in the early Asian session on Wednesday.
- Betting on the financial market increased after Powell of the Fed said that the US Central Bank could begin to cut rates as soon as this month.
- Employment offers in the US increased by 374,000 to 7,769 million in May, better than estimated.
The NZD/USD PAR attracts some buyers around 0.6105 during the early European session on Wednesday. The US dollar (USD) weakens against the New Zealand dollar (NZD) as the fees for federal reserve (FED) rates increase. The US employment change report for June will be at the Care Center later on Wednesday.
At the last minute of Tuesday, the president of the FED, Jerome Powell, reiterated that the US Central Bank will wait for more data before beginning to make monetary policy moreland, but did not rule out a reduction of rates at the July meeting. The short -term interest rates futures pointed to approximately one in four possibilities of a rate cut for the July meeting after the comments, compared to less than one in five previously, according to the CME Fedwatch tool.
In addition, China’s optimistic economic data provides some support to the Kiwi, which acts as Proxy of China, since China is an important commercial partner of New Zealand. The purchasing managers index (PMI) Caixin de Manufacturing of China rose to 50.4 in June from 48.3 in May, exceeding the expectations of 49.0. The 50th mark separates the growth of the contraction.
On the other hand, employment offers in the US increased unexpectedly in May, supporting the dollar. The data published on Tuesday showed that Jolts employment offers in the US increased to 7.76 million in May, compared to 7,395 million offers reported in April. This figure exceeded the expectation of the market of 7.3 million.
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.
