- The NZD/USD weakens around 0.6000 in the early Asian session on Monday.
- The new tariff fears undermine the New Zealand dollar.
- China’s trade balance data will be the culminating point later on Monday.
The NZD/USD pair quotes in negative territory about 0.6000 during the first hours of Monday’s Asian negotiation. The renewed commercial tensions caused by US President Donald Trump drags the New Zealand dollar (NZD) downwards against the US dollar (USD). Investors are prepared for China’s trade balance data for June, which will be published later on Monday.
Trump revived the commercial tensions with new tariffs on the European Union (EU) and Mexico on Saturday, declaring a 30%rate. Trump added that the new rates will take effect on August 1 if they cannot negotiate better terms. Renewed concerns about the global trade war probably weigh on the highest -risk currency such as the NZD against USD in the short term.
The operators expect China’s commercial data to obtain more clues about the impact of American tariffs and the potential for shipping. On Tuesday, the Gross Domestic Product (GDP) report for the second quarter (Q2) will be the center of attention. The Chinese economy is expected to grow 5.2% year -on -year in the quarter that ended in June. In addition, it is projected that the growth of retail sales in China has decelerated 5.5% in June interannual from 6.4% in May.
The potential of higher American tariffs about Chinese imports in the coming months has led some analysts to ask Beijin to provide more stimulus measures to boost growth. Any positive development related to greater consumer -centered support could boost the Kiwi, which acts as Proxy of China, since China is an important commercial partner of New Zealand.
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.
