The current week has been challenging for the New Zealand dollar. It had to survive the fall and take-off and then find a fragile balance. Analysts do not rule out the Kiwi rally in the near future.
At the beginning of the week, experts recorded subsidence of the pair NZD / USD. New Zealand dollar lost ground amid the strengthening of the US dollar. The publication of weak data from the dairy auction, provided by the New Zealand company Fonterra, also contributed to this. Recall that the economy of New Zealand is export-oriented. The lion's share of exports is dairy products and the support for the New Zealand economy is provided by the rise in world prices of dairy products, increasing many times the foreign exchange earnings. Analysts emphasize that this has a positive effect on the dynamics of the Kiwi.
According to experts, the "New Zealand dollar" is supported by the positive mood of consumers, recorded in the fourth quarter of 2019. According to Westpac, this month there was an improvement in business sentiment in New Zealand, thus, experts expect GDP growth of 0.6%. These expectations were met on Wednesday, December 18, where the Kiwi rose rapidly amid strong data on the country GDP. A fly in the ointment not only gave very positive statistics on the trade balance but this also practically negated the positive effect of the growth of the NZD / USD pair.
At the moment, the NZD / USD pair runs between 0.6590-0.6591, trying to go beyond this. The tandem maintains a positive trend, trading mostly in the upward channel.
Analysts fear a breakdown of the support level of 0.6485, which could lead to a further fall in tandem. In the case of the implementation of such kind of scenario, the resumption of the global downtrend of the NZD / USD pair is not ruled out.
According to experts, the current market trend is the growth of commodity currencies, which include the New Zealand dollar. However, in the context of a global downtrend, this rise may be unnecessary. Experts warn that in such a situation, closing long positions on the Kiwi may strengthen the rally.
