NZD/USD depreciates as traders expect the Fed to adopt a cautious approach regarding a rate cut next month. The Fed remains on alert following the latest US inflation data, which highlighted an increase in consumer spending for October. The New Zealand Dollar may struggle as the US plans further AI chip sanctions against China.
Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency.