US Dollar to New Zealand Dollar (USD/NZD) Exchange Rate Flourishes; ‘Kiwi’ Plummets
The US Dollar (USD) is proving popular in the currency market of late, presently trading against the New Zealand Dollar (NZD) at 1.1784. The USD to NZD exchange rate has reached highs of 1.1791 this session, versus the low point of 1.1750.
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The ‘Kiwi’ has slipped to 0.8487 against the ‘Greenback’ following favourable US data and renewed optimism regarding the timeframe of US interest rate hikes.
Expert in the field Peter Cavanaugh commented: ‘There was a combination of good US data in the form of GDP and really bad domestic news. The New Zealand Dollar to US Dollar exchange rate is lower for those two reasons. It ended last week on a negative note and it has simply been downhill traffic all the way.’
With a wealth of US data publishing on Friday, the US Dollar may gain support to rally further in the currency market.
The US Federal Open Market Committee continued to taper their bond buying program, with the current trajectory to end the fiscal policy measure in October. The US will publish Personal Consumption Expenditure today which will show the rate in which consumers are spending within the US economy which will help to forecast inflation.
Furthermore the US will reveal the current Unemployment rate currently forecast to stagnate at 6.1%. Unemployment figures remain of hot topic in the US following Chairwoman for the Federal Reserve, Janet Yellen, suggesting that the US could see interest rate hikes in the near future if employment figures continue to produce favourable figures.
The Federal Reserve stated: ‘Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Fiscal policy is restraining economic growth, although the extent of restraint is diminishing. Inflation has moved somewhat closer to the Committee’s longer-run objective. Longer-term inflation expectations have remained stable.’
Conversely the New Zealand Dollar has plummeted 3.3% thus far in July after New Zealand experienced an unexpected drop in commodity prices. However, the Reserve Bank of New Zealand had hinted that the currency was overvalued and may need to fall.
New Zealand based foreign exchange expert Tim Kelleher commented: ‘The Reserve Bank will be quite happy that the US Dollar is stronger across the board. The “Kiwi” is probably relatively fair value at the moment but we can move with further US Dollar strength, back towards the bottom end of the ranges again.’
For now the US Dollar will appear to remain bullish in the US Dollar to New Zealand Dollar exchange rate as it continues to dominate the currency market. The NZD to USD currency pairing is presently trading at 0.8487.