- The NZD/USD loses ground to around 0.5985 in the Asian session on Friday.
- China told the US to cancel all unilateral tariffs if you want conversations.
- China’s Ministry of Finance said that the current impulse of world economic growth was insufficient due to tariff threats and commercial wars.
The NZD/USD pair drops around 0.5985 during Friday’s Asian session, pressured by the strongest dollar. The lack of progress towards the de -escalation of the commercial agreement between the US and China exerts some sales pressure on the Kiwi, which acts as Proxy of China. The final reading of the Michigan consumer’s feeling will be published later on Friday.
The president of the USA, Donald Trump, said Thursday night that his administration was talking to China about commerce. Meanwhile, China said that negotiations on the economy and commerce had not been carried out, and urged the US to raise all unilateral tariff measures if it really wanted to solve the problem. Concerns about commercial tensions between the two largest economies in the world could undermine the New Zealand dollar (NZD), since China is an important commercial partner of New Zealand.
The growing bets that the New Zealand Bank reservation (RBNZ) will reduce its official cash (OCR) rate at the May meeting could contribute to the decline of the NZD. Markets completely expect the RBNZ to cut its OCR of 3.5% at 25 basic points (PBS) in May, with an additional reduction to 2.75% by the end of the year.
China’s Ministry of Finance said Friday that the current impulse of world economic growth was insufficient, with tariff and commercial wars, further impacting economic and financial stability. Meanwhile, the Governor of the Popular Bank of China (PBOC), PAN GongSheng, said that economic fragmentation and commercial tensions continue to interrupt the industrial supply chain and weaken the impulse of global growth. However, any positive development around Chinese stimulus measures could help limit Kiwi losses in the short term.
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.
