- The NZD/USD could weaken as the decrease in commercial tensions in the US supports the US dollar.
- Trump pointed out possible trade agreements with India, Japan and South Korea, and expressed optimism about resolution with China.
- The operators remain cautious before the next report of non -agricultural payrolls.
The NZD/USD goes back its recent losses from the previous session, quoting around 0.5940 during the European hours of Friday. The upward potential of the torque could be restricted as the signs of decreased commercial tensions in the US support the US dollar (USD).
The feeling of investors changed after the US president, Donald Trump, pointed out possible commercial agreements with India, Japan and South Korea, and expressed optimism about the resolution of tensions with China.
However, the US dollar index (DXY), which tracks the USD against a basket of six main currencies, is losing ground after registering profits in the three previous sessions, quoting about 99.90 at the time of writing this text.
The feeling of the market remains cautious before the next report of non -agricultural payroll (NFP), since investors seek information on how tariffs can be impacting employment trends.
The US Treasury Secretary, Janet Yellen, warned that Trump’s tariffs could have a “tremendously adverse” impact on the US economy. The Secretary of the Treasury, Scott Besent, said that the inverted yield curve, with the yields two years below the federal funds rate, supports the need for rate cuts by the Federal Reserve.
The NZD/USD gains force as the New Zealand dollar (NZD) can be seen, supported by the improvement of the feeling of the market and the indications of decreased commercial tensions between the US and China, given the strong commercial ties of New Zealand with China.
According to Bloomberg, China is open to resume commercial conversations, recognizing the recent approaches to the USA while emphasizing that Washington must address tariff problems, which are considered the main source of the ongoing tensions.
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.
