- The NZD/USD operates in positive territory around 0.5950 in the Asian session on Wednesday.
- The persistent uncertainty about tariffs and fears of an economic deceleration in the US weigh on the US dollar.
- Operators expect the RBNZ to cut their OCR in 25 bp in May.
The NZD/USD pair is strengthened to about 0.5950 during Thursday’s Asian negotiation hours, driven by the weakening of the US dollar (USD). Operators prepare for initial weekly applications for unemployment subsidy in the US, the Chicago Fed National Activity Index, orders for lasting goods and sales of existing housing, which will be published later on Thursday.
The secretary of the US Treasury, Scott Besent, said Tuesday that the current tariff confrontation against China is unsustainable and expects a “unfaired” in the commercial war between the two greatest economies in the world in the near future. Late on Wednesday, the administration of US President Donald Trump declared that he has spoken with 90 countries about established tariffs.
The Trump administration said that US will establish tariffs for China in the next two to three weeks, and depends on China how soon tariffs can be reduced. The uncertainty about Trump’s commercial policies generates concerns about the economic slowdown in the US and drags the dollar down.
On the Neozyre Front, the growing expectation that the New Zealand Reserve Bank (RBNZ) will reduce its official cash rate (OCR) at the May meeting could limit the torque potential. The markets fully expect the RBNZ to cut its OCR of 3.5% in 25 basic points (PB) in May, with an additional reduction to 2.75% by the end of the year.
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.
