- New Zealand registered a commercial surplus of record goods with the US in April, driven by an increase in agricultural exports.
- The US dollar faces winds against the Moody’s credit reduction, high interest rates and growing deficit projections.
- Markets expect advances in “A great beautiful law” of Trump in the Chamber as a possible catalyst for the USD.
The New Zealand dollar (NZD) continues to strengthen itself against the US dollar (USD) on Wednesday, with the publication of a record commercial surplus in April that highlights the largest monthly surplus of goods registered with the United States (USA).
Amid the concerns about the increase in the costs of American imports and the broader fiscal uncertainty, New Zealand positive commercial figures have reinforced the confidence of investors in the Kiwi.
The data underlined the resilience of exports of the country, particularly in agricultural goods, which represented approximately 25% of the year -on -year increase. This solid performance has led operators to favor NZD as an attractive alternative to the dollar, offering relative and potential stability of return at a time of high global uncertainty.
Meanwhile, the US dollar is still weighed by multiple winds against: a recent credit reduction of Moody’s, high interest rates and growing tax risks linked to the proposal of President Donald Trump to extend the 2017 tax reductions under its wide “a great beautiful law.” It is projected that these proposed extensions will expand the US federal deficit in more than 3.8 billion dollars, further amplifying concerns about the sustainability of long -term debt.
The NZD/USD is currently being negotiated near maximums of several weeks, with a technical impulse inclined in favor of a greater increase. However, the short -term management will probably depend on developments in Washington, where President Trump is actively pressing the House of Representatives to approve his bill before the recess of the Fallen Day. Progress or political obstacles in this front could influence the feeling around the US dollar and, in turn, in the trajectory of the NZD/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.
