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.

NZD/CAD Technical Analysis Today

The NZD/CAD exchange rate is currently trading at 0.9220, down from its high of 0.9300 on June 15, 2023. The currency pair is under pressure due to a number of factors, including:

• The strengthening of the US dollar against other major currencies
• The slowdown in New Zealand's economic growth
• The widening of the New Zealand-Canada trade deficit

Looking ahead, the NZD/CAD exchange rate is expected to remain under pressure. However, there are a number of factors that could support the currency pair, including:

• A slowdown in the US economic growth
• A trade war between the US and Canada
• A depreciation of the Canadian dollar

NZD/CAD Correlation

The NZD/CAD exchange rate is positively correlated with the Australian dollar and the New Zealand stock market. This means that when the Australian dollar or the New Zealand stock market rises, the NZD/CAD exchange rate is likely to rise as well.

NZD/CAD Buy or Sell Today

Traders who are looking to buy the NZD/CAD exchange rate could consider doing so at the current levels. However, traders should be aware of the risks involved, including the possibility of further weakness in the currency pair.

Breaking Down NZD/CAD

The New Zealand dollar (NZD) is the currency of New Zealand. It is made up of 100 cents and is officially represented by the symbols $ or NZ$ to distinguish it from other currencies based on dollars. The New Zealand dollar is also used in Cook Islands, Niue, Tokelau, and the Pitcairn Islands. The currency is commonly known as the kiwi, named after the national bird depicted on the one-dollar coin. The decimalization of the currency occurred in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound.

The Canadian dollar (CAD) is the currency of Canada. It is also classified as a commodity currency, as it exhibits a correlation to the prices of energy products such as crude oil and natural gas. In the NZD/CAD pair, the New Zealand dollar is the first currency (base currency), and the Canadian dollar is the second currency (quote currency), making it a cross-currency pair.

What Determines the NZD/CAD Exchange Rate?

Several factors can impact the valuation of the NZD/CAD exchange rate, including:

The Reserve Bank of New Zealand (RBNZ) is the central bank of New Zealand. Its main objective is to maintain the stability of New Zealand's financial system. The RBNZ is responsible for implementing monetary policy, meeting the currency needs of the public, and providing support services for other banks in the country.

The Bank of Canada (BOC) is the central bank of Canada. It was founded in 1934 with the mandate to promote the economic and financial welfare of Canada. The BOC and its Governor are responsible for handling monetary policies, printing money, and managing interest rates of Canadian banks.

Economic Events:

The movement in New Zealand and Canadian economic events can influence the exchange rates of the NZD/CAD pair. Major economic events that can impact the exchange rate include:

Gross Domestic Product (GDP) – GDP is a central measure of economic growth in the respective regions.

Employment Change – Changes in employment can affect both currencies, as labor market conditions impact inflation rates.

Consumer Price Index (CPI) – Both the RBNZ and BOC aim to maintain price stability, so they monitor inflation indicators like the CPI. Deviations from the central bank's inflation target may lead to adjustments in monetary policy.

Trade Balance – New Zealand and Canada have strong trade sectors, so changes in export and import levels can impact their respective currencies.

Political Announcements & Natural Disasters – Unforeseen events such as political elections, policy changes, conflicts, terrorism, and natural disasters can cause significant fluctuations in the NZD/CAD exchange rate.

Currency Correlations

Correlation is a measure of the mutual relationship or connection between two or more things. In the forex world, currency pairs can exhibit positive or negative correlations.

Positive correlation – When pairs move in tandem with each other. In the case of NZD/CAD, the NZD/CAD - NZD/USD, NZD/CAD - EUR/NZD, and NZD/CAD - USD/PLN pairs are positively correlated.

Negative correlation – When pairs move in the opposite direction. For NZD/CAD, the NZD/CAD - EUR/NZD, NZD/CAD - USD/PLN, and NZD/CAD - XAU/EUR pairs exhibit negative correlations.

New Zealand dollar (NZD) has a close relationship with gold prices and oil prices. While correlations can be significant, the price of crude oil has historically shown a high correlation with the Canadian dollar (Loonie). Therefore, a rise in crude oil prices tends to increase the value of the Canadian dollar, and vice versa.

NZD/CAD Specifications

The NZD/CAD is traded in amounts denominated in New Zealand dollars and Canadian dollars.
Standard lot Size: 100,000
Mini lot size: 10,000
Price minimum increment: 0.00001
Pip Value: $7.54