Commodity currencies continue to be under pressure due to rising tensions in international trade, which negatively affect the rates of the NZD/USD. The value of the New Zealand dollar since the beginning of the year decreased from 0.74 to 0.668 USD. The current value of the NZD is 0.672 USD, which is the lowest price since April 2016 . Over the past 30 days we have observed the consolidation of the rates in the range of 0.668 - 0.684 USD. However, perspectives for the NZD are questionable: the decline is likely to continue at least until the recently reached level of 0.668 USD.
The USD is strengthening against most currencies. This week the impetus for strengthening was the result of the FED meeting, where a positive assessment for the current economic situation in the United States was given, considering the strong macroeconomic statistics. Despite the fact that this time the rate was not revised, investors saw a positive attitude by the FED and a willingness to continue tightening monetary policy according to the established plan. At the same time, the growth of tension in trade relations with China due to the strengthening of protectionist measures to support the US economy also has had a positive effect on the USD exchange rate.
The situation in New Zealand is the opposite. The trade war between China and the United States has had a negative impact on the cost of raw materials, including the cost of milk powder, which is exported to China in large volumes. New Zealand's economic growth has been threatened and business sentiment in New Zealand has worsened. The rate of the NZD is negatively affected by the RBNZ's extremely soft monetary policy. In particular, the RBNZ meeting tomorrow will most likely not please investors: the rate will not be revised, and the soft monetary policy will remain unchanged.
In the current situation, the most optimal would be the short deals. At the same time, in the short term the decline in prices will be limited by the current flat trend. There is also a possibility of a downward trend recovery in case of a breakout of the 0.66 USD level.
