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Although the Reserve Bank of Australia is in the spotlight on Tuesday, the New Zealand Dollar may react against the U.S. Dollar in a similar fashion. In other words, if the Australian Dollar falls because of the cut in interest rates then the New Zealand Dollar is likely to weaken also since their economies are so similar.
Demand for higher risk could drive the New Zealand Dollar higher versus the U.S. Dollar, or if the NZD/USD is weaker, this fresh demand could provide additional support. Like other economies that do business with China, the slowdown in its economy is hurting demand. New Zealand is not immune from this slowdown in demand. In order to stimulate interest in its goods and services, the Reserve Bank of New Zealand may soon initiate a rate cute of its own. This could pressure the