- The NZD/USD attracts some buyers around 0.6065 in the first Asian session on Friday.
- Trump is considering appointing the successor earlier than expected.
- The optimistic economic data of New Zealand reinforced the RBNZ to stand firm in July.
The NZD/USD wins land for the fourth consecutive day about 0.6065 during the first Asian session on Friday. The rebound is supported by a weakening of the dollar in the midst of renewed concerns about the independence of the Federal Reserve of the US (Fed). The data of the US Personal Consumer Expenses Index (PCE) will occupy the Care Center later on Friday.
The president of the USA Donald Trump could undermine the authority of the president of the FED, Jerome Powell, to soon appoint his candidate to lead the Central Bank next year. Trump said he has a list of possible Powell successors reduced to “three or four people”, without appointing the finalists.
Chicago Fed president Austan Goolsbee said Thursday that political waves are not a factor in decision -making, nor would the appointment of a shadow president, according to CNBC. The renewed concerns about the future independence and credibility of the Fed could undermine the US dollar (USD) and act as a tail wind for the crossing in the short term.
The Gross Domestic Product (GDP) of the First Quarter of New Zealand, stronger than expected, and the best data of the May Commercial Survey reinforce the decision of the New Zealand Reserve Bank (RBNZ) to postpone more cuts of interest rates. This, in turn, provides some support to Kiwi. Operators expect the New Zealand Reserve Bank (RBNZ) to deliver only one more rates cut in the current relaxation cycle, which will probably be fully valued for November.
However, renewed and climbing tensions in the Middle East or the economic uncertainty caused by Trump’s tariff policy could drag the most risky assets such as the NZD down against USD.
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.
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