- The NZD/USD records modest profits around 0.5935 in the Early Asian Session on Thursday.
- New Zealand CPI inflation rose to 2.5% year -on -year in the first quarter (Q1) as import costs increased.
- The operators are still betting on feat cuts from the Fed this year, starting in June.
The NZD/USD extends the rally to about 0.5935 during the first hours of Asian negotiation on Thursday. The New Zealand dollar (NZD) can be seen slightly against the US dollar (USD) after higher inflation data. Construction permissions, the beginnings of housing, the manufacturing index of the Fed of Philadelphia and the initial applications of the US weekly unemployment subsidy will be published later on Thursday.
The data published by Statistics New Zealand on Thursday showed that the Consumer Price Index (CPI) of the country rose 2.5% year -on -year in the first quarter (Q1) of 2025, compared to the increase of 2.2% recorded in the fourth quarter of 2024. This reading was higher than the expectation of 2.3%. Meanwhile, quarterly CPI inflation rose to 0.9% in Q1 from the previous reading of 0.5% and above the market consensus of 0.7%.
The inflation figures were somewhat higher than the February forecasts of the Bank of the Reserve (RBNZ), but analysts believe that the increase will not prevent additional reductions in the official cash rate (OCR) in the coming months.
As for USD, consumer spending was stronger than expected in March, the US Census Bureau revealed on Wednesday. The US retail sales increased 1.4% in March, followed by the increase of 0.2% observed in February. This figure was better than the 1.3%estimate. The markets reacted little to the publication.
The operators have bets on features of the Federal Reserve (FED) this year after the president of the FED, Jerome Powell, said that the Central Bank is well positioned to wait for greater clarity before making changes in the position of the policy. Financial markets expect the Fed to resume fees in June and that by the end of the year the policy rate, currently in the range of 4.25%-4.50%, is a lower percentage point.
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.
