By IFCMarkets

Fed cuts rate

The upward trend means strengthening of the New Zealand dollar against the US dollar. The Fed lowered the rate in order to support the US economy amid the coronavirus epidemic. For the same reason, the Reserve Bank of Australia also lowered its rate to a historic minimum of 0.5% from 0.75%. All these actions may support the New Zealand dollar. The Reserve Bank of New Zealand can also lower its rate at a meeting on March 25, which is 1% at present. A positive factor for the NZD is the increase in residential properties prices in New Zealand in February 2020, by 5.3% on an annualized basis. This is much higher than the annual inflation of 1.9%. The average cost of a house in New Zealand reached NZ $ 722.5 thousand ($ 452.4 thousand). Note that China is the main trading partner of New Zealand, so the exchange rate may depend on the state of not only the New Zealand, but also the Chinese economy. Worth mentioning that in 2019, foreign trade indicators were positive: the macroeconomic indicator, called New Zealand’s terms of trade, increased by 7% in the 4th quarter compared to the same quarter of 2018.

Summary of technical analysis

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