- The NZD/USD is strengthened to around 0.5965 in the Asian session on Wednesday.
- The optimistic Chinese GDP data of the second quarter support the NZD, which acts as Proxy of China.
- The president of the Fed, Logan, saw that keeping the stable rates for a time would be adequate.
The NZD/USD attracts some buyers about 0.5965, breaking the three -day loss streak during the first Asian session on Wednesday. The Gross Domestic Product (GDP) report of China, better than expected, provides a certain support to the Kiwi, which acts as China proxy. Investors will keep an eye on the US Production Price Index (IPP).
The Chinese economy grew by 5.2% year -on -year in the quarter from April to June compared to the previous year, compared to 5.4% in the first quarter, according to the National Statistics Office (NBS) on Tuesday. This figure was higher than the 5.1%estimate. In addition, the Gross Domestic Product rate (GDP) of China increased 1.1% intertrmetral in the second quarter after advanceing 1.2% in the previous quarter, above the market consensus of 0.9%.
China has avoided a strong economic slowdown thanks to policy support since factories have taken advantage of a commercial truce between the US and China to advance shipments. This, in turn, could support the Kiwi, who acts as Proxy of China, in the short term, since China is an important commercial partner of New Zealand.
The United States (USA) and China have until August 12 to renew that agreement or face the return of the painful bilateral tariffs that would risk introducing a virtual embargo on trade between the two largest economies in the world. Any sign of renewed commercial tensions could drag the NZD down against the US dollar (USD).
As for the USD, the cautious position of the US Federal Reserve (Fed) could raise the dollar and act as a wind against for the pair. The president of the Dallas Fed Bank, Lorie Logan, said Tuesday that the Fed will probably need to keep interest rates where they are more to ensure that inflation is kept low against the upward pressure of the Trump administration tariffs. Financial markets expect the US Central Bank to stay waiting at the July meeting and then reduce in a percentage spot in September.
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.
