- NZD/USD is approximately 0.5675 in the early Asian Friday session.
- RBNZ is expected to reduce its official cash price by 50 basis points at the February meeting.
- Trump said he would demand a decrease in interest rates immediately.
NZD/USD pair circulates about 0.5675 during the early Asian session on Friday. The New Zealand dollar (NZD) is struggling to obtain a ground amid uncertainty about the tariffs of tariffs from China by US President Donald Trump and the stance of the New Zealand Reserve (RBNZ).
Inflation data at the Consumer Prices in New Zealand (CPI) for the fourth quarter of 2024 revealed that the basic inflation continues to soften, raising the bets that RBNZ will make greater price cuts. Al -Makazat market is now pricing in nearly 90 % of the possibility of reducing 50 basis points (BPS) on February 19, adding to the two that was delivered earlier in the session. RBNZ is expected to offer a total of 100 basis points of price cuts for the rest of 2025.
On the other hand, the negative side of the husband may be limited after Trump’s comments. Late Thursday, Trump said he wanted to reduce the American Federal Reserve (Fed) interest rates immediately. “With the drop in oil prices, I will request low interest rates immediately, and likewise it must decrease all over the world,” Trump said at the World Economic Forum in Davos, Switzerland.
Investors will closely monitor more clarity on Trump’s tariff policies as well as American economic data. Flash US S & P Global Manufacturing and Services Purchase Managers (PMI) for January will get the lead position later on Friday. In addition, current home sales data in the United States and consumer morale data will be published in Michigan.
Common questions about the New Zealand dollar
The New Zealand dollar (NZD), also known as Kiwi, is a well -known trading currency among investors. Its value is widely determined by the health of the New Zealand economy and the country’s central bank policy. However, there are some unique characteristics that can make NZD move. The performance of the Chinese economy tends to move kiwi because China is the largest commercial partner in New Zealand. The bad news of the Chinese economy is likely to mean exports less than New Zealand to the country, and thus strike the economy. Another factor moves NZD is dairy prices because the dairy industry is the main export of New Zealand. High dairy prices enhance export income, and contribute positively to the economy and thus to NZD.
The Reserve Bank in New Zealand (RBNZ) aims to achieve and maintain the rate of inflation between 1 % and 3 % in the medium term, focusing on keeping it near the mid -2 % point. To this end, the bank determines an appropriate level of interest rates. When inflation is very high, RBNZ will increase interest rates to cool the economy, but this step will make bond returns higher, which increases investor calls to invest in the country and thus enhance NZD. On the contrary, low interest rates tend to weaken NZD. A comparison of the so -called virtuous rate, or how to compare the rates in New Zealand, can compare it to the one that was identified by the American Federal Reserve, a major role in transferring the NZD/USD pair.
New Zealand’s macroeconomic data versions are the key to assessing the state of the economy and can affect the evaluation of the New Zealand dollar (NZD). The strong economy, based on high economic growth, is a decrease in unemployment and high confidence is good for NZD. Higher economic growth attracts foreign investment and may encourage the New Zealand Reserve to increase interest rates, if this economic power corresponds to high inflation. On the contrary, if economic data is weak, NZD is likely to decrease.
The New Zealand dollar (NZD) tends to strengthen during risk periods, or when investors see the wider market risk that is low and optimistic about growth. This tends to lead to a more convenient look of goods and so -called “commodity currencies” like Kiwi. On the contrary, NZD tends to be weak in times of turmoil in the market or economic uncertainty where investors tend to sell high -risk assets and flee to the most resigned safe havens.
