NZD/USD soars to near 0.6030 as market sentiment favors risky assets. The RBNZ surprisingly announced an interest rate cut by 25 bps on Wednesday. Firm Fed rate-cut prospects keep the US Dollar’s upside limited. The Kiwi asset strengthens as appeal for risky assets has improved. Market sentiment improves significantly as fears of the United States entering a recession have ebbed on upbeat Retail Sales for July and lower weekly Jobless Claims in the week ending August 9.
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. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export.