Forex News

International currency market is the largest and biggest financial market in the world but the flip side to the story is that it is also the most fluid market. Needless to say the economic condition of the country determines whether the value of that particular currency will be high or low, in the international currency market. US dollar has ruled the charts for a very long period of time and still remains the undisputed king, as far as international currency trade is concerned. We have seen a lot of pressure in case of the New Zealand dollar. It has taken a lot of beating and the main reason why New Zealand dollar has taken a beating is the economic condition of the country.

The latest data reveals that unemployment in New Zealand is at an all time high and this was reason enough for the international community to press the panic button. The figure gives away the story; the unemployment rate stands at 7.3%, much above the expectations of the analysts. More over the government of the day still needs to prove itself, and to the world at large that it can do something for the country and that too at a very fast pace. Recession has still not shown any sign of recovery. Add to this the rising inflation rate and the bad debts from the housing sector and it will not be difficult to understand why New Zealand dollar has taken a beating and is still under the scanner. Again the figure will give away the story; New Zealand dollar in comparison to the US dollar is at 0.69416. The lending rate in New Zealand is 2.5%; this again puts pressure on the New Zealand dollar.

China is more interested in investing in Australia in comparison to New Zealand (of course due to its own economic interest); this also puts a lot of pressure on the New Zealand dollar. Chinese economy has grown steadily, rather the economy is growing steadily and hence their tilt towards Australia puts the currency of New Zealand under tremendous pressure. Though the New Zealand dollar has recovered, to an extent, in comparison to what it was in 2008, they still have to go a long way if they want their currency to stabilize further.