The NZD/CAD pair is the abbreviated term used for the New Zealand dollar and Canadian dollar. This pair does not have a nickname. Before we get into the particulars, what exactly does the NZD/CAD rate mean? The exchange rate tells you how many New Zealand dollars (the quote currency) are required to purchase one New Canadian dollar (base currency). For example, if the pair is trading at 1.19, it means it takes 1.19 New Zealand dollars to buy 1 Canadian dollar.

Breaking Down ‘NZD/CAD’

The New Zealand dollar (NZD) is the currency of New Zealand. NZD is made up of 100 cents and this currency is officially represented by the symbol $ or NZ$ to set it apart from other currencies based in dollars. we can use this currency in Cook Islands, Niue, Tokelau, and the Pitcairn Islands. This currency’s nickname is kiwi and the reason behind this is the that national bird found stamped on the one-dollar coin. The decimalization of the currency took place in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound.Whereas, the Canadian dollar is also classified as a commodity currency, as it exhibits a correlation to the energy product's crude oil and natural gas. Since the New Zealand dollar is a first currency (base currency) and the Canadian dollar is a second currency (the quote currency), the pair is called a cross-currency pair.

What Determines the NZD/CAD Exchange Rate?

Several factors can impact the NZD/CAD rate valuation, including:The Reserve Bank of New Zealand or RBNZ is the name of the central bank of New Zealand. Its main objective is to maintain the stability of New Zealand's financial system, Apart from this, it is also responsible for maintaining the monetary policy, meeting the currency needs of the public and providing support services for other banks in the country.At the BOC front, the Bank of Canada was founded in 1934 under the Bank of Canada Act. The Act stated that the Bank of Canada was founded to promote the economic and financial welfare of Canada. The BOC and its Governor are liable for handling the monetary policies, printing money and managing the Canadian banks' interest rates.

Economic Events:

The movement in the New Zealand and Canadian economic events determine the exchange rates. Top of the line economic events includes GDP, Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for related currency and impacts the value of either the New Zealand dollar & Canadian dollar, causing fluctuations in the NZD/CAD exchange rate.

Major Economic Events:

Gross Domestic Product – The Gross Domestic Product is the central measure of economic growth in the region.Employment Change – Both currencies are sensitive to changes in employment, as slacks in the labor market cause a drop in Inflation rates.Consumer Price Index – Since one of the goals of RBNZ and BOC is to maintain price stability, they keep an eye on inflation indicators such as the CPI. If the annual CPI deviates from the central bank’s target, the central banks could make use of their monetary policy tools to keep inflation in check.Trade Balance – New Zealand and Canada have an extremely robust trade the sector, so currency traders and bank officials alike tend to watch changes in the countries’ export and import levels.Political announcements & natural disasters – Besides the scheduled economic events, political elections, new systems, wars, terror incidents, natural calamities, etc. can all cause severe variations within NZD/CAD.

Currency Correlations

Correlation is merely a mutual relationship or connection between two or more things.Positive correlation – The positive relationship merely is when pairs move in tandem with each other.In the forex world, NZD/CAD - NZD/USD, NZD/CAD - EUR/NZD, and NZD/CAD - USD/PLN currency pairs are positively correlated.Negative correlation – In contrast, a negative relationship is when forex pairs move in the opposite direction, For example, NZD/CAD - EUR/NZD, NZD/CAD - USD/PLN, and NZD/CAD - XAU/EUR.New Zealand (NZD) has a close relationship with gold prices and oil prices. While the correlations (positive or negative) can be significant, Crude Oil & Loonie: Typically, the price of crude oil has been highly correlated with the Loonie. Therefore, a rise in crude oil prices increases the value of the Canadian dollar and vice versa.

NZD/CAD Specifications

Standard lot Size: 100,000 Mini lot size: 10,000 Price minimum increment: 0.00001 Pip Value: $7.54