- The NZD/USD recovers positive land as the USD rally after NFP fades rapidly.
- The fiscal concerns of the US and a positive risk tone seem to undermine the secure shelter dollar.
- The attention now focuses on China’s inflation data and at the RBNZ meeting next Wednesday.
The NZD/USD pair relies on the bounce of the previous night from the 0.6030 region, a weekly minimum, and wins some positive impulse on Friday. Cash prices rise to the 0.6080 area during the early European session and, for now, seem to have ended a two -day loss streak in the middle of a modest weakness of the US dollar (USD).
The operators reduced the expectations that the Federal Reserve (FED) cut the interest rates in July after the publication of US labor data stronger than expected on Thursday. However, the initial market reaction turns out to be ephemeral amid the concerns that the draft tax cuts and expenses of US President Donald Trump would further worsen the long -term debt problems in America. This, in turn, keeps the USD’s bundles on the defensive and acts as a tail wind for the NZD/USD.
Apart from this, market optimism is considered another factor that undermines the safe refuge status of the dollar and benefits the risk -sensitive kiwi. Meanwhile, the NZD/USD pair is still on its way to registering profits for the second consecutive week, although uncertainty about Trump’s commercial policies could limit any additional gain. Operators could also refrain from aggressive bets amid relatively low negotiation volumes due to a holiday in the US.
Market attention now focuses on the publication of China’s inflation figures and at the New Zealand Reserve Bank Meeting (RBNZ) next Wednesday, which will boost the New Zealand dollar (NZD) and provide a new impulse to the NZD/USD pair. However, the aforementioned fundamental background seems to lean in favor of the USD bassists and suggests that the path of lower resistance for the currency pair is still upwards.
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.
