If you have watched 'Lord of the Rings', you may know that Middle Earth was filmed in the mountains of New Zealand. Except for Baggins(Frobo Baggins)The hometown of his Hobbit friends, New Zealand is also one of Australia's neighboring countries in Oceania, located in the southern Pacific Ocean. The country is mainly composed of two islands, North Island and South Island, as well as some small islands. New Zealand, known for having more sheep than people, has400Ten thousand residents. To make you clearer about what this represents, let's give an example,2011New York alone has a population of840Ten thousand.
New Zealand is also known asAotearoaThe Maori language means "hometown of Changbai Cloud". Maori is one of the main languages in New Zealand.
New Zealand: Facts, Data, and Characteristics
Economic OverviewDue to its small population, New Zealand's economy is also relatively small.2011New ZealandGDPby1230Billion US dollars, ranking among all global economies65. But don't underestimate New Zealand, as it plays a very important role in world trade. New Zealand's economic activities mainly rely on trade, especially with the southern continent(Australia)The Kingdom of the Rising Sun(Japan)And Uncle Sam(U.S.A)Inter trade. Its economy is export-oriented, with major export commodities such as ore, metals, and wool accounting for New ZealandGDPOne third of it. It also exports cows and dairy products. Does Angus beef sound familiar? New Zealand's main industries include agriculture and tourism, while its manufacturing and technology sectors are small. Therefore, the goods it imports from other countries include heavy machinery, equipment, vehicles, and electronic products. Since New Zealand lifted many restrictions on foreign investment barriers, the World Bank has praised New Zealand as a commercially friendly country second only to Singapore in the world. Monetary and fiscal policiesNew Zealand Federal Reserve(New Zealand Central Bank)Responsible for the country's monetary and fiscal policies. At present, the bank's president is Bernard, and the New Zealand Federal Reserve holds annual meetings8Sub monetary policy conference. The task of the central bank is to maintain price stability, determine interest rates, and monitor output and exchange rates. In order to maintain price stability, the New Zealand Federal Reserve needs to ensure that the annual inflation rate reaches the central bank's set level1.5%Otherwise, the government has the right to fire the Governor of the Reserve Bank of New Zealand(We're not joking)。 The New Zealand Federal Reserve has the following monetary policy tools: The official discount rate is determined by the Chairman of the Federal Reserve of New Zealand and will affect the short-term interest rate level. At a rate higher than the official discount rate25Click to lend at a rate lower than this25By borrowing, the central bank can regulate the interest rates of individuals and enterprises. Open market operations are aimed at achieving cash targets or the amount of reserves held in commercial banks. By predicting cash targets on a daily basis, the New Zealand Federal Reserve can calculate how much capital needs to be injected into the economy to achieve its goals. Understanding New Zealand dollarsNew Zealand dollar(New Zealand dollars)The nickname is "Kiwi". It is a bird. The Kiwi is a symbol of New Zealand... but let's take a look at the country's currency, known as the Kiwi, and its interesting features.
Let me take a look at these products! Due to New Zealand's reliance on commodity and agricultural exports, its economic performance is closely related to commodity prices. If the price of goods increases, the price of New Zealand's exports will correspondingly increase, which will contribute more to the countryGDP. highGDPThis indicates good economic performance, which will lead to the appreciation of the New Zealand dollar. On the contrary, a decrease in commodity prices means a decrease in the total export priceGDPThe contribution has decreased. lowGDPThis will lead to a depreciation of the New Zealand dollar. I am working hand in hand with the Australian dollarBecause Australia is New Zealand's top trading partner, its economic performance has a significant impact on the New Zealand economy. For example, when the Australian economy performs well, Australian companies will increase their import activity. Guess who will benefit from this? Of course it's New Zealand! Like the Australian dollar, I enjoy arbitrage trading!Like Australia, New Zealand has higher interest rates compared to other economies such as the United States, the United Kingdom, and Japan. The difference in interest rates between economies is an indicator of capital flows. Due to investors' preference for high returns, they sell low yielding investments and buy high yielding assets or currencies. In other words, the higher the interest rate, the higher the inflow of funds. I want more immigrants.Because New Zealand's population is less than half that of New York, the increase in immigration has a significant impact on the country's economy. This is because the population has increased, leading to an increase in demand and consumption for goods. I am also very sensitive to weather conditions.New Zealand's economy is largely affected by agriculture, which means severe weather conditions such as drought have a significant negative impact on the country's economy. Heat waves can also affect Australia and lead to forest fires, leading toGDP1%Losses. This is not good for New Zealand. Important economic indicators related to the New Zealand dollar gross domestic product(GDP)Like other countries,GDPIt is a part of the New Zealand Economic Report.GDPTo measure the overall performance of the New Zealand economy, it will have an impact on the demand for the New Zealand dollar. Consumer Price Index(CPI)：CPIMeasure changes in price levels. As a measure of inflation, it is closely monitored by the New Zealand Federal Reserve to determine changes in monetary policy. Its purpose is to maintain price stability, remember? Trade Balance: New Zealand's economy is export-oriented, and in transactions, the trade balance is usually observed to determine international demand for products produced in New Zealand. What factors cause changes in the New Zealand dollar?economic growthPositiveGDPThe growth reflects the good economic condition of New Zealand, which will increase demand for the New Zealand dollar. NegativeGDPThe growth data indicates poor economic performance in the country, which will lower demand for the New Zealand dollar. Export surgeHigh demand for New Zealand products usually meansGDPHigh, in turn, promotes the appreciation of the New Zealand dollar. On the contrary, low export volume is beneficial forGDPThe contribution is relatively small, which will lead to the depreciation of the New Zealand dollar. Rising commodity pricesThe rise in commodity prices has led to an increase in New Zealand's total export value, which in turn has driven upGDP. The decrease in commodity prices will lead to a decrease in the total export value, which will pull it downGDP。 New Zealand dollars/USD tradingNew Zealand dollars/Trading positions in US dollars are measured in US dollars. Value per point in New Zealand dollars/Calculation of the current price of the US dollar(Four decimal places make up one point)。 Gains and losses are priced in US dollars. about10Ten thousand New Zealand dollars/The position in US dollars, with each point changing in value, is10USD. about1Ten thousand New Zealand dollars/The position in US dollars, with each point changing1USD. The calculation of margin trading is based on US dollars. For example, if New Zealand dollars/The current exchange rate for the US dollar is0.7000The leverage ratio is100:1， transaction10The position in NZD 10000 requires700USD. transaction1The position in NZD 10000 requires70USD. You see, because the value of the New Zealand dollar is lower than the US dollar, it requires the least amount of margin among all major currencies. This means that trading in New Zealand dollars is relatively cheaper. New Zealand dollars/US dollar trading techniquesNew Zealand's strong economic report will drive the appreciation of the New Zealand dollar. If the probability of a good economic report is high, it means that New Zealand dollars should be invested/Long position in US dollars. If the economic report performs poorly, it will lead to a depreciation of the New Zealand dollar. If future economic reports are lower than expected, this means that New Zealand dollars should be invested/Short positions in the US dollar. In addition to paying attention to economic reports, paying attention to commodity price behavior can also contribute to the New Zealand dollar/Dollar trading provides signals. In most cases, when the demand for high-risk assets is strong, commodity prices rise. At this point, investors will invest their funds in high-yield assets, such asgoldSell low yielding US dollars along with other commodities. Therefore, the commodity based New Zealand dollar will significantly increase compared to the safe haven US dollar. On the other hand, when risk aversion forces investors to flee to safe havens, the New Zealand dollar depreciates against the US dollar. Like Australia, the New Zealand dollar is one of the best candidates for arbitrage trading. Arbitrage trading involves buying high interest rate currencies, selling low interest rate currencies, and New Zealand's high interest rate support for the New Zealand dollar carry trade.
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