The NZD/USD gains strength to approach 0.5995 in the early Asian session on Tuesday, adding 0.35% in the day.
Fed Governor Bowman said the Central Bank should consider interest rate cuts soon.
Investors expect the semiannual testimonies of President Powell and the US consumer’s confidence report of June later on Tuesday.
The NZD/USD Par attracts some buyers around 0.5995 during the early Asian session on Tuesday. The US dollar (USD) weakens against the New Zealand dollar (NZD) due to a moderate Fed speech. Investors will keep an eye on the semiannual testimonies of President Powell and the Confidence Report of the US consumer of the US consumer of June later on Tuesday.
The Vice President of Supervision of the Fed, Michelle Bowman, a well -known hawk, said on Monday that the US Central Bank should consider interest rate cuts soon, since the risks for the labor market can be increasing and for the growing expectations that Iran’s response to the US bombardment of some nuclear sites in Iran will be limited.
According to Reuters, the operators increased bets for more feat cuts after the governor of the Fed, Christopher Waller, said Friday that the Fed should consider reducing rates at their July meeting. The markets were valuing 46 basic points (PB) cuts this year before Waller’s comments.
President Powell of the Fed will testify to the US Congress on Tuesday and Wednesday. Any surprise hard line comment by those responsible for the Fed could help limit the losses of the USD and create a wind against the torque in the short term.
Gross Domestic Product (GDP) data of the first quarter of New Zealand, stronger than expected, published last week, provide some support to the NZD against the USD. The operators expect the New Zealand Reserve Bank (RBNZ) to deliver only one more rates in the current relaxation cycle, which will probably be fully valued for November.
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.
