The New Zealand Dollar Outlook: NZD/USD May Rise on RBNZ, Watch S&P 500 Index? The New Zealand Dollar Outlook is that the New Zealand dollar may soon rise due to a higher RBNZ interest rate, although the New Zealand government has denied any intention of raising interest rates. However, if interest rates do rise, the NZD/USD will undoubtedly appreciate as investors will seek to offset the higher US Dollar/NZD by selling the NZD to get higher returns from US Dollar investments in their countries.
Investors seeking to offset the US Dollar/NZD would most likely look to other countries like China and Australia as they are the main beneficiaries from higher US Dollar interest rates. China’s economy is slowing as its GDP growth slows and the Chinese People’s Budget is being pushed to the limits. But, in this case, investors may not want to buy the NZD in the short term because the Chinese economy is unlikely to recover as quickly as the US Dollar.
However, in this case, it is possible that the NZD/USD will appreciate as economic policy makers continue to tighten the money supply to try to support the economy. If economic policy makers do to tighten the money supply, there is likely to be higher inflation and consequently higher prices for goods and services. With inflation and higher prices, investors may prefer to hold onto their NZD rather than using other methods such as the US Dollar or the Euro.
The New Zealand dollar is expected to appreciate against the US Dollar after the RBNZ announced a tightening of monetary policy. However, investors may decide to hold off on buying the NZD if the RBNZ does not provide further details on the rate increases. It could take some time before further details emerge from the government.
For now, the currency outlook for the New Zealand Dollar remains to be seen. The New Zealand government’s actions, however, has provided investors with additional information on their plan for monetary policy which may influence the currency outlook for the NZD.
In the short-term, the New Zealand Dollar has strengthened against the US Dollar, however, the NZD/USD remains under pressure and may only strengthen further in the coming weeks as the NZD/USD continues to benefit from the upward pressure on US Dollar interest rates. The upside potential benefits of a higher NZD/USD could outweigh the downside risks in the near term, particularly if investors decide to hold onto their NZD and wait for a greater appreciation in the dollar. In this case, investors may want to be bearish on their NZD/USD because if the dollar gains, the NZD could lose more value as the US Dollar loses value.
The New Zealand Dollar Outlook: NZD/USD May Receive Support From Higher Interest Rates The future of the New Zealand Dollar depends on the US Federal Reserve’s actions. In addition, it is possible that inflation pressures can push down the US Dollar and result in a weaker US Dollar, thereby boosting the NZD/USD against the NZD.
However, the strength of inflationary pressures may result in a stronger NZD in the future and lower trading prices. Therefore, in the long run, a weak NZD may not result in more appreciation in the New Zealand Dollar.
The New Zealand Dollar Outlook: NZD/USD May Receive Support From Higher Interest Rates The strength of inflationary pressures may result in a stronger NZD in the future and lower trading prices. Therefore, in the long run, a weak NZD may not result in more appreciation in the New Zealand Dollar. In the short-term, the New Zealand Dollar remains under pressure against the US Dollar and may only strengthen further in the coming weeks. If investors decide to hold onto their NZD and wait for a stronger NZD, they will not face any negative impacts on the New Zealand Dollar and therefore may decide to hold onto their NZD/USD.
The Future Of The New Zealand Dollar: NZD/USD Aids Holders of the New Zealand Dollar are in a Better Position Due To the weakness of the US Dollar, NZD/USD is able to help traders in the short-term. The NZD/USD is expected to strengthen and trade lower if the US Dollar remains under pressure on the international market.
In contrast, investors who choose to buy a New Zealand Dollar will face greater risks. They may experience a loss of more than 20% of the money they invested in the NZD/USD if the price of the NZD drops and the NZD/USD depreciates against the US Dollar. Therefore, investors may want to consider the short-term NZD/USD trends, but may want to hold onto the NZD if the US Dollar strengthens against the NZD/USD.