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About the NZD/USD (NewZealand dollar and US Dollar)
The NZD/USD pair is the abbreviated term used for Newzealand and US Dollar. the NewZealand dollar and US Dollar, nicknamed as Bird. Before we get into the particulars, what exactly does NZD/USD rate mean? The exchange rate tells you how many NewZealand dollars (the quote currency) are required to purchase one US Dollar (base currency). For example, if the pair is trading at 1.51, it means it takes 1.51 NewZealand dollar to buy 1 US Dollar
Breaking Down ‘NZD/USD
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 nickname is kiwi and the reason behind of its nickname 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
New Zealand has a market economy that is hugely dependent on global trade, largely with Australia, the European Union, the United States, China, and Japan. It has just small production and high-tech areas, as it is mainly focused on tourism and basic industries like agriculture. in 2005 the World Bank praised New Zealand for being the most business-friendly country in the world
This pair is the New Zealand Dollar vs. the U.S. Dollar. It is usually referred to as trading the “Kiwi” because the $1 coin represents the Kiwi bird. In 2012 the Reserve Bank of New Zealand occurred to decrease the Kiwi because it had appreciated so much. This currency is in the top 10 trading currencies list in the world
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, the NZD/CAD, EUR/NZD, and NZD/JPY currency pairs are positively correlated
Negative correlation – In contrast, a negative relationship is when forex pairs move in the opposite direction, For example, EUR/NZD, USD/THB, and AUD/NZD
New Zealand (NZD) has a close relationship with gold prices and oil prices. While the correlations (positive or negative) can be significant
Economic Events: The movement in the NewZealand dollar and US Dollar 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 Australian dollar or the Japanese yen, causing fluctuations in the NZD/USD exchange rate.
Major Economic Events
Gross Domestic Product – the gross domestic product is the central measure of economic growth in the region.
Employment Change – The Sterling is also sensitive to changes in employment, as slacks in the labor market causes a drop in Inflation rates.
Consumer Price Index – Since one of the goals of the BOP is to maintain price stability, they keep an eye on inflation indicators such as the CPI. If the annual CPI deviates from the central
Industrial Production – This measures a change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
Political Events - Another critical factor is the political aspect. Instability, as seen in the Brexit referendum, can entirely change the direction of the currencies. So, stay up-to-date on the latest political and economic news.
What Determines the NZD/USD exchange Rate?
Several factors can impact the NZD/USD rate valuation, including:
RBNZ and FRS Monetary Policies: Reserve Bank of New Zealand and the Federal Reserve System controls the supply of money in the market, to keep the economy on track. A dovish policy, which is also known as expansionary policy, from either of the central banks, weakens the related currency. In contrast, a hawkish monetary policy (contractionary policy) strengthens the currency
NZD/USD Specifications
The NZD/USD is traded in amounts denominated in the US Dollar.
Standard lot Size: 100,000
Mini lot size: 10,000
One pip in decimals 0.0001
Pip Value: $10.00
