NZDUSD analysis is an abbreviation for the New Zealand Dollar and US Dollar currency pair. This currency pair quote news this reader about how many US dollars it takes to buy one New Zealand dollar.
The value of the NZDUSD pair is set at 1 NZD per variable number of US dollars. For example, if a pair is trading at 1.50, it means that it takes 1.5 USD to buy 1 NZD .
Agriculture is a key factor in New Zealand’s economy. More than two-thirds of exports are agricultural. One of the defining factors affecting the New Zealand dollar is the price of dairy products. New Zealand is the world’s largest exporter of whole milk powder.
So, if milk prices are rising, New Zealand’s economy is likely to improve and traders may price the currency in anticipation. Tourism is another key element of New Zealand’s economy, so when visits to New Zealand become less expensive, the economy is expected to improve and the currency may appreciate in value..
Although New Zealand is one of the few countries where its agricultural sector is fully exposed to the international economy (no subsidies or tariffs), the NZDUSD pair may be traded for various financial reasons unrelated to the local economy.
New Zealand markets are the first to open a new trading day, and banks and traders may sometimes use this fact to place trades in anticipation of the next day’s events.
The narrow near-term price range dominated the NZDUSD pair, as financial institutions seem to allow current market conditions to remain the same. NZDUSD is likely to continue testing current support and resistance levels.
NZDUSD analysis and the impact of monetary and deliberative policies on it
NZDUSD analysis is also influenced by factors that affect the value of the New Zealand dollar / the US dollar in relation to each other and in other currencies. The interest rate differential between the Reserve Bank of New Zealand and US Federal Reserve will affect the value of these currencies when compared to each other.
Reserve Bank of New Zealand. “Official exchange rate.” When the Fed intervenes in open market activities to make the US dollar stronger, for example, the value of the NZDUSD pair can fall, due to the strength of the US dollar compared to the New Zealand dollar.
The New Zealand dollar is considered a portable trading currency as it is a relatively high-yielding currency. For this reason, investors often buy and fund the New Zealand dollar in a currency with a lower yield such as the Japanese yen or the Swiss franc..
Such trades are for risk-seeking investors and tend to close when investors become risk-averse. Proof of this was prevalent during the 2008 financial crisis when the New Zealand dollar fell nearly 50% against the Japanese yen. As volatility rose, investors broke up these trades, and the New Zealand dollar was one of many high-yielding currencies to fall during 2008 and 2009. The NZDUSD pair tends to correlate positively with its neighbor (AUD/USD).
Recovery after the financial crisis: In the aftermath of the financial crisis, the NZDUSD pair experienced periods of recovery, influenced by economic factors and market sentiment. The exchange rate often fluctuates in response to factors such as monetary policy decisions, commodity prices
Traders looking for a higher floor in the NZDUSD pair today should use quick take profits, as the bearish reversals of the return to perceived support are likely to continue in the short term.
NZDUSD analysis and various expectations ahead of US inflation data
NZDUSD analysis The reason why the non-agricultural employment price movement is described above is to highlight what could happen tomorrow when US inflation data is displayed. Light trading during the holiday caused somewhat dubious results, and this week’s early price action showed that financial institutions are waiting for tomorrow’s CPI results to confirm their medium-term outlook.
Traders need to prepare for quick conditions for the NZDUSD to start appearing on Thursday. While speculators participating in the NZDUSD pair will get today a chance to test the short-term technical perspective, the spread in the currency pair will start to widen tomorrow and price speed will be a certainty.
Short-term support should be monitored near the 0.62400 level, if it proves solid, it could be a signal that traders expect bullish momentum to develop in the NZDUSD pair. If the resistance challenge starts near the 0.62580 mark, NZDUSD may start targeting higher ratios. Financial institutions that have developed a weaker forecast for the US dollar may still expect the NZDUSD to rise, and may be prepared to attack en masse, but they will be cautious for now.
Day traders who want to participate in the NZDUSD pair today cannot be blamed. Bullish traders still believe that the NZDUSD pair has more room to recover the value seen just two weeks ago.
Trading tomorrow is sure to see a rapid movement before and after the US CPI figures. Financial institutions are likely to prepare for a rise in NZD/USD, but the aggregated results over the past two days confirm the tension for now.
NZDUSD analysis today: waiting for clear signals to trade
The New Zealand dollar (NZD/USD) pair is trading today in a sideways range
