- The NZD/USD earns land about 0.6080 in the early European session on Monday.
- The manufacturing PMI of the NBS of China rose to 49.7 in June; The non -manufacturing PMI increased to 50.5.
- Operators see 92.4% probability that the US Fed reduces rates at the September meeting.
The NZD/USD pair quotes in positive territory for six consecutive days around 0.6080 during the European session on Monday. The growing cuts of cuts in the interest rates of the Federal Reserve (FED) weigh on the US dollar (USD) against the New Zealand dollar (NZD). Fed officials are scheduled to talk later on Monday, including Raphael Bostic and Austan Goolsbee.
The data published by the National Office of Statistics of China (NBS) on Monday showed that the Index of Purchasing Managers (PMI) manufacturing the country rose to 49.7 in June from 49.5 in May. This figure was in line with the market consensus. Meanwhile, the NBS non -manufacturing PMI increased to 50.5 in June compared to 50.3 previous, stronger than the expectation of 50.3. The encouraging China’s economic data provides some support to the Kiwi, which acts as Proxy of China, since China is an important commercial partner of New Zealand.
In addition, investors interpreted the testimony of the president of the FED, Jerome Powell, before the US Congress last week. This, in turn, continues to weaken the dollar and act as a wind in favor for the NZD/USD. The markets have discounted almost 92.4% probability of a reduction of a quarter -point rates by the Fed, compared to 70% of a week ago, according to the Fedwatch tool of the CME.
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.
