NZDUSD Fundamental Analysis – 10-June-2024

NZD/USD—The New Zealand dollar is hovering around $0.61, primarily influenced by a stronger US Dollar. This fluctuation occurs as investors await the Federal Reserve’s upcoming decision on interest rates and the release of the US Consumer Price Index (CPI) report.

Strong US Jobs Data Hits NZD

Last week, the Kiwi faced downward pressure due to a robust rebound in the greenback. This rebound followed unexpectedly strong US jobs data, which has cast doubt on the Federal Reserve’s likelihood of reducing borrowing costs this year.

US Job Market Surges in May

The recent US labor market data revealed that the economy generated significantly more jobs than forecast in May, coupled with a resurgence in annual wage growth. These indicators underscore the labor market’s resilience, which, in turn, strengthens the US dollar.

RBNZ Maintains Rates, Economy Slows

On the domestic front, New Zealand’s’ relatively high interest rates continue to support the Kiwi, even as the economy shows signs of weakening. The Reserve Bank of New Zealand is anticipated to keep its policy stable until at least mid-2025, allowing ample time for a comprehensive assessment of economic data.

Summary

Understanding these dynamics is crucial for making informed financial decisions. While global economic indicators can exert substantial influence, domestic policies and economic conditions play an equally important role in currency valuation. Staying informed on these aspects can help navigate the complexities of the forex market.

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