It has been established by pretty much every financial expert and publication on the planet that the economy of the USA is, without a doubt, the biggest, strongest and most influential economy around.
But even the biggest and most powerful of economies is, at times, vulnerable, which is why, sometimes, pairing it with a currency that is not as big and is often under impact from different factors can lead to mutual success from both ends, and such is the case for the NZD/USD pairing and those that trade its binary options.
The Kiwi as it is affectionately called is the pairing of the US Dollar with the New Zealand Dollar and it is one of the top 10 most traded currency pairings on the forex market.
The economy of the US has been covered extensively in a few other articles with many aspects being touched upon, but the New Zealand economy has barely been referenced, and since it applies greatly to this pairing; you may as well have a little more in depth knowledge about it if you’re considering trading binary options of the NZD/USD pairing.
Perhaps the biggest reason the New Zealand is even in the current financial conversation, let alone being paired with many currencies is the fact that it has an economy that has fared relatively well through recent financial troubles that have affected the globe.
New Zealand’s economy is not without its challenges and battles. The biggest of which is its location and distance from other countries. New Zealand’s closest and biggest trade partner is Australia, and even that is around 4,000 Kilometers away, making trade challenging to say the least.
Other trade partners include China, the UK, Japan and the US.
We’ve all seen the movies and TV shows and heard the jokes being made at the expense of New Zealand, a lot of them have to do with sheep. But in reality, that’s no joke, sheep are one of the biggest forces driving the economy; they are responsible in one way or another for nearly 25% of all Kiwi exports, so the jokes, while funny at times, are no laughing matter at all.
In addition to various sheep based products New Zealand also exports great amounts of wood, a few precious metals such as gold & aluminum, wine and various other products.
Trading in the Kiwi pairing as it is called is often very similar to trading in the AUD, EU and GBP pairings, with so much of New Zealand’s economy dependent on trading with Australia and the UK, fluctuations in those currencies, which can be the result of factors out of New Zealand’s control can have vast impact on currencies changing direction.
Take for example the recent decline in oil prices, the majority of New Zealand’s oil comes from import out of the US, with the decline in prices comes less profitability in oil sales across the globe which affects the availability of currency for reserves as well as other expenses, more currency within the marketplace naturally causes a decline in its overall worth, which in turn causes pairings to fluctuate quite rapidly.
You might already be well versed in monitoring the financial conditions in the US, so when trading the Kiwi you’re only missing information regarding the NZ side of things.
In short, you would be best served watching the public service sector as well as any export information possible. The public sector is responsible for roughly 65% of the NZ economy, making it a substantial market driver in the island nation, and the importance of the export business to NZ economy has already been covered above.
Make sure you pay close attention to those details and instead of dining on sour fruits such as the Kiwi, your profitable account will be as rare as the Kiwi bird itself, all for trading binary options for the NZD/USD pairing.