New Zealand Dollar (NZD) - features of trading on cross-rates. Anton Hanzenko - Ester Holdings

New Zealand Dollar (NZD) – features of trading on cross-rates. Anton Hanzenko

The New Zealand Dollar (NZD) refers to the ten most traded currencies in Forex. The New Zealand dollar, like its closest neighbor and main trading partner, the Australian dollar, refers to commodity currencies, which makes their dynamics very similar.

New Zealand economy Data

The economy of New Zealand is one of the most globalized in the world. New Zealand has close trade relations with Australia, Japan, China, Canada, the United States and the eurozone, that depends to no small degree on the geographical location of the country. The processing of metals and food products form the major part of New Zealand’s economy. At the same time, the dairy industry of New Zealand deserves special attention, especially, GlobalDairyTrade milk auctions, which can significantly influence the dynamics of the New Zealand dollar. Also, the backbone of New Zealand’s exports are agriculture, sea food and processing, and woodworking.

The central bank of New Zealand is the Reserve Bank of New Zealand (RBNZ), which is characterized by extremely high interest rates on the background of other world banks with very popular currencies.

Fig. 1. Interest rates of RBNZ

So, from November 2016, the Reserve Bank of New Zealand maintains an interest rate of 1.75%, which in turn makes New Zealand very attractive for foreign investment.

The main stock index of New Zealand is S & P NZX 50, which has a clear dynamics with the pair NZD / USD (blue line) and serves as a leading indicator, which has an inverse correlation.

Fig. 2. Correlation of the New Zealand index S & P NZX 50 and the NZD / USD currency pair.

In turn, the New Zealand dollar has a high degree of correlation with commodity currencies and the Japanese yen.

Fig. 3. Correlation table

The New Zealand dollar may seem very specific due to some peculiarities, namely due to the link to raw materials and the influence of trading partners. But this currency can also act more volatile, thanks to these same properties.

Interesting fact

In the jargon of traders, a pair of NZD / USD or New Zealand dollar is called “kiwi”, in honor of Kiwi birds that live on the islands.

New Zealand is famous for the beauty of its nature. Therefore, this country attracts the attention of filmmakers. In New Zealand were made movie “The Lord of the Rings” and many others, where the actual field shooting was used.

Anton Hanzenko

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