NZD/USD – currency pair indicating the rate of the national currency of New Zealand in relation to to the US dollar.
The symbolic designation of the currency is$, the alphabetic one accepted on the Forex market is NZD, the designation is also common - NZ$.
The NZD/USD currency pair is often called "kiwi", since the 1 NZD coin depicts a kiwi bird. It is one of the 10 most traded currencies in the world, which is the most popular during several decades of the commodity boom taking place around the world. The value of the kiwi has become so high that the Reserve Bank of New Zealand in 2012 began to make efforts to intervene, seeking to devalue the New Zealand dollar.
New Zealand is geographically located in the Asia-Pacific region and is part of an unspoken pool Forex currencies for "night trading". This concept was introduced by European traders, the currencies of this pool begin to be tracked from 01-00 Moscow time. The New Zealand exchange is the first to open, but the main movements in the national currency occur at the opening of the Australian and Japanese exchanges. The increase in volatility allows you to "catch" movements in the "night" trades (for Europeans) in flat corridor or in trend, if economic news is expected to be released in the Asia-Pacific region.
If we compare the volatility of the pair in question during the operation of the European and American exchanges, then the latter win. Many strategies are configured to work on NZD/USD in American and Asian session.
In addition to New Zealand, the currency is used as a means of payment in the everyday life of several island states.
The name "dollar" in national money has replaced the name "pound".
The name of the currency-kiwi, came from the symbol-the national bird of the same name. Like its closest neighbor, Australia, New Zealand entered the new XXI century with plastic cash.
Impact of monetary policy
As in all countries, the national currency is subject to the influence of monetary policy, which is carried out by local financial regulators. This role is played by the Reserve Bank in New Zealand. The policy itself is built on the principles of inflation targeting.
In the 90s, the theory of supporting price and financial stability by keeping inflation in certain parameters spread among financial circles. An example was a neighbor pursuing the same policy, although it is necessary to make a reservation about the need for structural reforms before implementing such a policy, however, for currency traders, the clear policy of the Central Bank provided a stable interest in this pair, bringing it to the main currencies.
The reserve currency, having received international recognition, "kiwi" became due to the political stability and stability of the national economy. Countries can form gold and foreign exchange reserves using it.
Avoiding the weakening of its currency in 2014, the Reserve Bank of New Zealand gradually raised the interest rate to 3.5%, but the planned reversal allowed it to be reduced from 2015 to the present to 2%. Such a difference in rates compared to the "zero" and "negative" rates of developed countries attracts traders using the "carry trading" strategy, it is also worth paying attention to the accrued swap for positions held by traders for more than a day, its size is specified in the specification of the pair, the values vary, because they depend on the broker.
The dimension of the pair is identical to many currencies, it is one decimal place and with an accuracy of 4 or 5 decimal places, depending on the type of account with the Broker (0.72939).