Fundamental Analysis on NZDUSD
Interest Rates:
NZD Cash Rate = 5.50%
NZD Inflation Rate = 4.0%
NZD Interest Rate Adjusted for Inflation = 1.5%
USD Cash Rate = 5.50%
USD Inflation Rate = 3.3%
USD Interest Rate Adjusted for Inflation = 2.2%
Interest Rate Differential = 0.7
USD sees greater gains against the New Zealand Dollar due to a higher Interest Rate. Today (10/07/24) the Reserve Bank of New Zealand (RBNZ) confirmed that interest rates will remain at 5.50% and as a result we saw NZD fall against the USD. NZD inflation also remains high compared to USD.
Chinese Economy and it's impact on NZD:
According to the latest data released by Caixin, China's Services PMI fell from 54.0 in May to 51.2 in June as compared to the market forecast for a reading of 53.4. This adds to worries about a slowdown in the world's second-largest economy and acts as a headwind for commodity currencies, including the NZD. Apart from this, expectations that the RBNZ will cut rates earlier than projected further contribute to the NZDUSD rate going down. The next update on the NZD interest rate is Wednesday 14 August 2024.
New Zealand Commodities Exports:
China with a share of 26% (11.3 billion US$)
Australia with a share of 12.8% (5.42 billion US$)
USA with a share of 12% (5.08 billion US$)
Japan with a share of 5.51% (2.32 billion US$)
Korea with a share of 3.46% (1.46 billion US$)
China makes up an estimate of 26% of New Zealands exports. A slow Chinese economy will lead to further losses for the NZD.
28% of overall exports for New Zealand are Dairy Products. The price of Milk Futures (DC1!) has a strong correlation with the price of New Zealand Dollar Futures (6N1!). If the price of Dairy products continue to increase, this can lead to NZDUSD to see short term gains.
Overall, expect NZDUSD to continue going down due to a slower Chinese economy combined with volatility from Dairy Futures prices.
Upcoming USD CPI data:
US CPI data is set to be released tomorrow (11/07/2024). If US data can beat forecasts then we can see NZDUSD fall sharply. However, if data does not beat forecasts that we will see NZDUSD continue trading in a range.
My trade plan:
I will be looking to sell NZDUSD after CPI data is released this week. A break of the 0.606 level will see prices visit the 0.600 level. My longer term target for this pair is 0.587. This target is based on longer term USD strength across the board along with the slow down of the Chinese economy.
Interest Rates:
NZD Cash Rate = 5.50%
NZD Inflation Rate = 4.0%
NZD Interest Rate Adjusted for Inflation = 1.5%
USD Cash Rate = 5.50%
USD Inflation Rate = 3.3%
USD Interest Rate Adjusted for Inflation = 2.2%
Interest Rate Differential = 0.7
USD sees greater gains against the New Zealand Dollar due to a higher Interest Rate. Today (10/07/24) the Reserve Bank of New Zealand (RBNZ) confirmed that interest rates will remain at 5.50% and as a result we saw NZD fall against the USD. NZD inflation also remains high compared to USD.
Chinese Economy and it's impact on NZD:
According to the latest data released by Caixin, China's Services PMI fell from 54.0 in May to 51.2 in June as compared to the market forecast for a reading of 53.4. This adds to worries about a slowdown in the world's second-largest economy and acts as a headwind for commodity currencies, including the NZD. Apart from this, expectations that the RBNZ will cut rates earlier than projected further contribute to the NZDUSD rate going down. The next update on the NZD interest rate is Wednesday 14 August 2024.
New Zealand Commodities Exports:
China with a share of 26% (11.3 billion US$)
Australia with a share of 12.8% (5.42 billion US$)
USA with a share of 12% (5.08 billion US$)
Japan with a share of 5.51% (2.32 billion US$)
Korea with a share of 3.46% (1.46 billion US$)
China makes up an estimate of 26% of New Zealands exports. A slow Chinese economy will lead to further losses for the NZD.
28% of overall exports for New Zealand are Dairy Products. The price of Milk Futures (DC1!) has a strong correlation with the price of New Zealand Dollar Futures (6N1!). If the price of Dairy products continue to increase, this can lead to NZDUSD to see short term gains.
Overall, expect NZDUSD to continue going down due to a slower Chinese economy combined with volatility from Dairy Futures prices.
Upcoming USD CPI data:
US CPI data is set to be released tomorrow (11/07/2024). If US data can beat forecasts then we can see NZDUSD fall sharply. However, if data does not beat forecasts that we will see NZDUSD continue trading in a range.
My trade plan:
I will be looking to sell NZDUSD after CPI data is released this week. A break of the 0.606 level will see prices visit the 0.600 level. My longer term target for this pair is 0.587. This target is based on longer term USD strength across the board along with the slow down of the Chinese economy.
Note
NZD Weakness Continues.Trade active
0.600 price incoming!Trade closed manually
All targets reached!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.