How to Trade NZD/USD

Your capital may be at risk. This material is not investment advice.

NZD/USD is one of the many currencies, which are traded online in platforms such as IQ options. The currency pair is used by many traders all over the world to ask the question such as “How many United States dollars can the one New Zealand dollar purchase?” South African traders who are keen to profit from the trading of this currency pair can also trade on the gains or loses the New Zealand dollar makes over the United States dollar.

South African traders need to keep track of several economic indicators when trading on the NZ/USD currency pair. This is because the gains or loses any of the currency makes over the other are dependent on the economic changes taking place around the globe.

The way to go when trading on NZD-USD

When trading on the NZD-USD currency pair, what the South African traders need to know is when to buy a call or put option. If traders believe the price of New Zealand dollar will rise in comparison to the United States dollar, then they should purchase a call option. However, if the traders believe that the New Zealand dollar will decline in comparison to the United States dollar, then they should purchase a call option.

The profit margin is indicated at the beginning of the trade and thus traders stand a chance to profit a lot when the margin is high. When a trade goes wrong i.e. doesn’t turn into profit, it’s advisable to double the amount before purchasing a call or put option in order to recover the loss.

What economic indicators affect the NZD-USD currency pair?

The gain or loss any of the two currencies makes is dependent on economic indicators as said earlier. These economic indicators include:

  • Global dairy trade (GDT) – New Zealand is one of the world’s leading dairy products exporter. The country exports a huge chunk of its powered milk to China. So it is something all traders should keep an eye on. This is because when the demand for New Zealand milk products goes up, the milk products’ price also increases, strengthening the NZD against the USD as a result.
  • The Reserve Bank of New Zealand (RBNZ) – The central bank of New Zealand also plays a major role in the gains or loses the New Zealand dollar makes over the United States dollar. South African traders should keep an eye on the interest rates the central bank publishes or any other drastic measure the central bank takes because these will have an effect on how the currency pair trades.
  • Changes in consumers price index (CPI) or inflation in New Zealand will also play a major role when it comes to NZD-USD trading. The increase in the inflation rate in one of the two countries will result in a gain in the strength of the currency of the other country.

It must be noted that the economic indicators of the United States will have a greater impact on the NZD-USD price evolution compared to those of New Zealand.

Conclusion

South African traders should trade more often on the NZD-USD currency pair, which is also known as the kiwi pair. IQ Option, the best broker in industry, is committed to helping the South African traders profit more by investing in this currency pair.

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