Quote:
Originally Posted by lildon01
There are a number of reasons why the nzd/usd could have sold off in the last couple of months:
1. The Us dollar could have gained in strength;
2. The market could be pricing in a rate cut by the Reserve Bank of New Zealand, which would decrease the demand for the currency; Or
3. With the New Zealand "kiwi" being a "commodity currency", the commodities market could have gone bearish doing that time which would in turn decrease the demand that currency.
These are just a few of the possible reasons.
Don Campbell
|
Hi Don,
Thanks for the response and yes you are correct all of these are potential reasons that the Kiwi could decline in value.
In this particular instance I think most fundamental traders would agree that one of the major reasons for the decline in the currency pair is because there are signs that the New Zealand Economy is slowing which would mean that the central bank is less likely to raise interest rates in the future and potentially more likely to start moving towards cutting interest rates.
Best Regards,
Dave