The current movements on the market show that the price of the currency pair NZD/USD has increased by 0.85%, and, at the time of writing, it stands at 0.6886. The market shows that the national currency of New Zealand is increasing in other currency pairs as well.
The Reverse Bank of New Zealand recently announced to be holding the interest rate steadily at 0.25%, the decision was announced on Wednesday. It was forecasted by the leading economists in the region and experts that the rate would remain unchanged this month. However, as of now, the market is expecting the rate to be dropped by the central bank into negative territory next year.
Some of the top Forex brokers in New Zealand have announced that the demand for the currency pair has increased significantly over the last few days, which, could be one of the reasons why the price has been increasing steadily for the past few hours. The currency pair has hit the new 20-month high recently, and one of the major reasons for it the fact that the unchanged interest rates of the central bank have boosted the bond-being program. The national currency has put a solid performance, one of the major reasons being the successful fight of New Zealand against the Covid-19 pandemic.
While New Zealand manages to be very successful in the fight against Covid-19, other countries around the world are seeing huge challenges.
Changing Prices of NZD/USD
The lines chart shown above indicates how the prices of the currency pair NZD/USD has been changing over the last two years. The chart stars from March 2, 2019, when the prices of the currency pair started falling. Over the year 2019, although the prices were not stable, they managed to get back to the level of the beginning of the year in December.
However, at the beginning of 2020, as the Covid-19 pandemic started spreading around the world, the price of the currency pair went down a lot. After March, the prices of the currency pair went up again. For several months, the price of the currency pair was increasing but saw some challenges in October. As of now, the price of the currency pair is back to the pre-pandemic level and is even a little higher than it was.
New Zealand was one of the only countries around the world that managed to successfully fight against the Covid-19 pandemic. With just several dozens active cases, the virus is not spreading in the country fast at all, especially compared to other countries around the world.
In total, there are 1988 reported cases in the country, out of which 1911 have already recovered and 25 have died. The country has only 52 active cases of now. On the other hand, in Europe and other parts of the world, the virus is spreading at a very fast pace. Many countries in Europe have adopted new restrictive measures to challenge the spreading of the virus.
Another thing that influences the price of the currency pair heavily is the political situation in the United States. Recently, Joe Biden was elected as the next president of the country, which had a huge impact on the worldwide market. Many experts are saying that if the transition of power won’t happen peacefully, it could have a huge impact on the financial markets around the world.
As Joe Biden was elected, USD was seen going down in many different pairs, one of them being NZD/USD. In addition, the Covid-19 cases are increasing very fast in the United States, as of now, there are more than 10 million reported cases in the country and it is still spreading very fast.
The recent steps taken by the RBNZ have had a huge influence on the national currency of New Zealand. The main policy of the central bank of the country will remain very much unchanged because the economic recovery of the country very much depends on the Covid-19 situation and the efforts taken to overcome the challenges.
If the situation continues going the way it is in the country, and the RBNZ shows a more resilient economy than previously expected, the situation might be very good for the country. If the country continues its successful fight against Covid-19, we might see further boosting of the New Zealand Dollar.