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by The New Zealand dollar hovered around $0.618 (NZD/USD), maintaining its position from the day before. This came as the US dollar weakened, supporting the Kiwi. Investors are closely watching the Federal Reserve as they expect an interest rate cut in the coming week.
The uncertainty around the size of this cut has led to some caution in the market, but it has also helped the New Zealand dollar stay strong.
NZDUSD Fundamental Analysis – 13-September-2024
China’s Economic Push Helps New Zealand’s Currency
In addition, news from China on Thursday suggested that President Xi Jinping has asked officials to work harder toward hitting economic goals. This is good news for New Zealand, as China is its biggest trade partner.
When China’s economy grows, it often helps the New Zealand dollar, so this update likely boosted the currency.
Expected Rate Cuts from New Zealand’s Central Bank
Looking within New Zealand, the Reserve Bank of New Zealand (RBNZ) is expected to lower interest rates again before the year ends. Two more meetings are left this year, and experts think rate cuts will be announced at both.
One of these cuts might be more significant than usual, with a possible 50-basis-point reduction, which could affect the Kiwi.
Weekly Gains for the Kiwi Supported by Global Factors
The Kiwi dollar seems on track for a slight weekly gain thanks to improving global stock markets and rising commodity prices. These factors have provided an additional boost to the currency, keeping it stable in the face of uncertainty elsewhere.
Conclusion
In summary, the New Zealand dollar benefits from global and domestic factors. A weaker US dollar, positive news from China, and expectations of further interest rate cuts in New Zealand all support the Kiwi’s recent gains.
As we move forward, monitoring global markets and central bank actions will be vital to understanding the currency’s future movement.
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