In today’s early Asian session, the NZD/USD pair is extending its rally around 0.6250, despite trading slightly weaker at 0.6245 after hitting eight-month highs. The US dollar is under pressure as the Federal Reserve signals upcoming rate cuts, with a 34.5% chance of a 50 basis points cut in September and 100 basis points easing expected this year.
Recent data shows US Consumer Confidence Index improving to 103.3 in August, but concerns about the labor market persist with the Unemployment Rate at a near three-year high of 4.3%. Traders are awaiting US GDP and PCE Price Index releases later this week.
Following the RBNZ’s surprise rate cut in August, speculation of further cuts looms. The central bank may cut rates by 25 bps in October and November, potentially weighing on the NZD and limiting the pair’s upside potential.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), known as the Kiwi, is influenced by the country’s economy, central bank policy, Chinese economy performance, dairy prices, and interest rate differentials. Macroeconomic data releases in New Zealand, economic growth, unemployment rates, and market sentiment also impact the NZD’s valuation.
Overall, the NZD/USD pair’s movement is driven by a combination of economic data, central bank policies, market sentiment, and global economic trends. Understanding these factors can help investors make informed decisions in the forex market.