New Zealand Dollar General Info
The New Zealand dollar is informally called the ‘kiwi’ by foreign exchange traders and analysts due to the kiwi bird, which is native to New Zealand, being something of a national symbol for the country. The kiwi bird is also depicted on New Zealand’s one-dollar coin.
Although the New Zealand dollar is considered one of the eight FX ‘majors’, it is actually only the world’s eleventh most traded currency. Apart from the other seven majors – the US dollar, euro, yen, pound, Australian dollar, Canadian dollar and Swiss franc – the New Zealand dollar’s share of the foreign exchange market (around 2%) also falls behind that of the Mexican peso, the Chinese yuan and the Swedish krona. The currencies of China and Mexico are not considered majors due to their emerging market status, while the krona’s share of the market has only exceeded that of the New Zealand dollar fairly recently (in 2016, according to the Bank for International Settlements) and so is not yet considered ahead of New Zealand’s currency.
In the past two decades, the New Zealand dollar’s lowest value against the US dollar occurred in October 2000 when the NZD/USD exchange rate traded at just 0.3901. The currency’s two-decade high occurred in August 2011 when NZD/USD reached 0.8842, although it could be said that this high valuation was achieved twice, because in July 2014 the exchange rate reached 0.8836, just several pips shy of that achieved in 2011.
Among the majors, the New Zealand dollar is considered a riskier currency, which means that its value will fall against the larger majors (especially JPY, USD, CHF, GBP and EUR) during periods of economic uncertainty or when global geopolitical risk is elevated, or during bouts of high market volatility.
NZD - Market View
The New Zealand dollar came unstuck in August.
In late July and August, investors began to realise that unlike other central banks, the RBNZ would not be hiking interest rates anytime soon; the central bank said as much at its August meeting. The RBNZ remains cautious on inflation.
In late August, the New Zealand dollar fell to a fourteen-month low against EUR (0.6009) and within a whisker of a sixteen-month low against AUD (0.9074). Against USD, the kiwi was steady in the mid-0.72s but was down 3.3% on the month.
Decision makers at the RBNZ will be happy with the kiwi’s August decline. The bank governor, Graham Wheeler, expressed a desire for NZD to fall at the bank’s August meeting.
In September, Dutch bank ABN Amro predicted NZD/USD would rise to 0.82 by the end of 2018. As reasons for the pair’s climb, ABN cited “strong conviction” on future US dollar weakness, future commodity price rises, an improvement in global trade and potential rate hikes (in 2018) by the RBNZ.
NZD/USD - 08:00 NZST
1 Day 1 Week: New Zealand Dollar was up against the United States Dollar with the NZD/USD at 0.7366, a rise of 0.67% and also up for the last 7 days with a rise of 1.86%.
3 Month Trend: NZD/USD is trending mid 3-month range [Hi:0.7522, Lo:0.7150] and for the quarter is up 1.36%.