A pair of NZD (New Zealand dollar) and USD (US dollar) is considered quite exotic in the Forex market.
In total, about 7% financial transactions are made with it, which makes it the so-called "major". This asset is not popular among Russian traders (many simply do not know how to handle it). NZD/USD has a second name in honor of New Zealand's symbol bird, the kiwi.
Important! New Zealand has a market economy. The basis of the economic system is goods obtained through agriculture. The leading New Zealand partners are the USA, Australia, Japan and China. Accordingly, a trader trading the NZD/USD pair needs to follow the news of the microeconomics of these countries.
The base currency of this pair is the New Zealand dollar. The value of an asset depends on its exchange rate. The quote currency is the US dollar. As the USD rises and the NZD falls, the asset loses value.
- the greatest activity is observed during the European session, which starts at about 10 am Moscow time and ends only at 6 pm;
- the volatility of the pair cannot be called high, daily fluctuations rarely exceed 100 points;
- there is a direct correlation with the AUD/USD asset (Austrian and US dollars).
Regarding the correlation between AUD/USD and NZD/USD, it is worth saying that the relationship between these pairs is due to the fact that the same factors influence their price. True, the Austrian dollar is more susceptible to changes due to some global political and economic news.
Correlation cannot be relied on as a fundamental factor, since it is a secondary indicator.
What factors influence NZD/USD?
Why do Russian traders consider the NZD/USD pair exotic? The answer to this question is of interest to many beginners in the Forex market. In fact, the whole point is that the exchange rate of the New Zealand dollar largely depends on the cost of milk.
That is, if you look at the graph of the cost of milk, you can see a direct correlation with the asset of the "New Zealander".
Important! You can track the current price of milk in various sources, but the most popular and reliable is the Global Dairy Trade. This is an international auction that sets trends in the cost of dairy products. On the official site You can see all the changes that take place.
Every 14 days, new statistics appear, which you need to rely on when trading the "New Zealander".
Therefore, many Russian traders do not risk investing in a pair of New Zealand and US dollars. The factors by which the price of an asset is formed are indeed very exotic. The value of NZD/USD is literally following the price of milk.
New Zealand is a global supplier of this product, so this trend is not surprising.
Important! NZD/USD doesn't always follow the milk. Sometimes an asset simply lags behind for a while. Maximum per quarter. This is due to rare updates of "dairy statistics" and other factors affecting the price of NZD/USD.
In addition to milk, you also need to track the cost of sheep's wool. This can be done with the help of the International Monetary Fund (IMF). The price of sheep's wool is not a fundamental indicator, but also plays a big role.
New Zealand has a highly developed tourism sector, with 2 to 4 million tourists visiting the country every year (on average). Of course, there are much more popular countries, but it is worth considering that only 4.5 million people live in New Zealand. Therefore, during the tourist season, the NZD/USD asset is experiencing a positive trend.
You also need to track microeconomic news (GDP, interest rates in the central banks of the US and New Zealand, and so on). In general, follow the global economic calendar.
This currency pair may be slightly affected by news from other countries, especially from New Zealand's trading partners.
You also need to watch the dollar, since changes in this currency entail the movement of the asset. This is another difficulty in trading the New Zealand dollar, since the US dollar is much less predictable than the New Zealand dollar.
The impact of cataclysms on the course of the "New Zealander"
This factor is very important, because in New Zealand the economy is based on the agricultural industry. Any natural disasters - drought, tsunamis, earthquakes, floods - affect the exchange rate of the New Zealand dollar. Traders should understand that New Zealand is, in fact, two large islands on the fault of tectonic plates.
The country is surrounded by water on all sides. Therefore, natural disasters in this area happen very often.
Traders are strongly advised to follow the New Zealand news.
It is advisable to take them from English-language sources, since all relevant information appears many times faster there. This allows you to be on the alert and, in which case, quickly sell assets.
Is NZD/USD good for scalping?
Scalping is short-term trading, the purpose of which is to quickly close a deal. Kiwi is not suitable for such trading, since this currency pair is not very volatile.
Jumps are observed in those periods when statistics appear on the Global Dairy Trade website. At such moments, you can do scalping, but there is no guarantee that this will bring a lot of profit.
In general, the “New Zealander” is more suitable for traders aimed at calm trading and long-term transactions. It is better to trade during the daytime, when the currency pair is most active.
Below there will be two indicative screenshots - on the first one there are "jumps" of the currency pair for every 15 minutes, on the second - changes during the day.
Is it suitable for beginners?
This asset is ideal for beginners. The New Zealander is predictable. It is enough just to track certain indicators in order to understand how the currency pair will behave in a given period of time.
It is relatively safe to invest in NZD/USD, since the risk of losing everything at once is extremely low. But it should be borne in mind that the likelihood of large earnings is also small. An asset can bring a constant and stable income.
Important! The trader will also need to keep track of the CRB index. This is a kind of indicator of the commodity market, which allows you to monitor current prices. On the site you can look at international inflation, which will provide comprehensive data on the main economic indicator that affects assets.
Summing up. NZD/USD is a calm currency pair that is not suitable for scalpers and people who want to make big profits from a few transactions. Asset changes are easy predictif you track agricultural trends in New Zealand.
Microeconomic news has practically no effect on the kiwi, which is an advantage for novice traders who do not understand all the intricacies of the market.
The correlation is observed with the Austrian/US dollar pair. There is a direct correlation between NZD/USD and the cost of milk.