NZD (New Zealand Dollar)

What Is the NZD (New Zealand Dollar)?

The New Zealand dollar (NZD) is the official currency of New Zealand. NZD is comprised of 100 pennies and is in many cases addressed by the symbol $ or NZ$ to set it apart from different currencies in light of dollars. NZD likewise sees use in the Cook Islands, Niue, Tokelau, and the Pitcairn Islands.

Figuring out the NZD (New Zealand Dollar)

Decimalization of the NZD (division into 100 pennies) occurred in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound. Initially pegged to the United States dollar, NZD went through a series of changes in the fixed exchange rate until March of 1985, when the currency was permitted to uninhibitedly float.

New Zealand currency has had a long history of more than 160 years. As a matter of fact, during the 1800s, New Zealand utilized its coins and banknotes before British currency was even legal currency. In any case, nothing was made official until 1933, when New Zealand issued their most memorable official coins, in light of the British pound, shilling, and pence.

The principal coins had photos of the native birds of New Zealand on the "tails" side, a practice that has proceeded, with the British ruler on the head side.

The NZD is lovingly alluded to as the 'Kiwi,' to pay tribute to a flightless bird called a kiwi, which is imagined on one side of the country's $1 coin.

In 1934, the Reserve Bank of New Zealand was laid out, turning into the main provider of banknotes. The original notes had different designs, including that of a kiwi, the country's Coat of Arms, Maori King Tawhiao, and Fiordland's Miter Peak.

It required an additional 30 years before the Reserve Bank replaced the currency of pounds, shillings, and pence with genuine dollars and pennies. In the year 1967 alone, the Bank printed 27 million new banknotes and 165 million new coins.

The NZD currency has a long history of beautiful and energetic money and, since its most memorable giving, has changed its printed design several times. In 1992, the pictures of Queen Elizabeth on the banknotes were all altered to reflect noticeable residents of New Zealand like Edmund Hillary, Kate Sheppard, Apirana Ngata, and Ernest Rutherford, along with nearby birds and plants on the backs of the notes.

Beginning around 1999, the New Zealand government has delivered polymer or plastic renditions of the New Zealand dollar, which has made the note safer against falsifying. Also, the new polymer creation has increased the longevity of the note.

It is estimated that the polymer note endures four times longer than standard material or paper notes. Interestingly, the polymer note can go through a washing machine without experiencing any material damage. In 2016, the currency had its latest update, with even more splendid tones and refreshed security highlights.

NZD/USD

The value of the NZD/USD pair is quoted as 1 New Zealand dollar for each X U.S. dollars. For instance, assuming the pair is trading at 1.50, it means that it takes 1.5 U.S. dollars to buy 1 New Zealand dollar.

NZD/USD is impacted by factors that influence the value of the New Zealand dollar as well as the U.S. dollar comparable to one another and different currencies. Thus, the interest rate differential between the Reserve Bank of New Zealand (RBNZ) and the Federal Reserve (Fed) will influence the value of these currencies when compared to one another.

At the point when the Fed mediates in open market activities to make the U.S. dollar stronger, for instance, the value of the NZD/USD cross could decline, due to a strengthening of the U.S. dollar when compared to the New Zealand dollar.

The NZD/USD will in general have a positive correlation to its neighbor, the Australian dollar (AUD/USD).

The New Zealand dollar is viewed as a convey trade currency in that it is moderately high-yielding so investors will frequently buy the NZD and fund it with a lower-yielding currency, for example, the Japanese yen or the Swiss franc.

Evidence of this was common during the financial crisis when the NZD was one of some high-yielding currencies that fell during 2008 and 2009. Margin trading positions on the NZD/Japanese yen exchange rate increased consistently during 2007-08, as Japanese investors exploited the wide differential between New Zealand and Japanese interest rates.

During the choppiness in global financial markets during mid to late 2008, the cumulative net long positions held by Japanese margin traders in the NZD fell by almost 90%.

Different factors influencing the NZD are dairy prices and the travel industry numbers. New Zealand is one of the world's greatest exporters of whole milk powder. This means that assuming milk prices are on the rise the New Zealand economy is probably going to do admirably, which will push up the currency.

The travel industry is one more staple of the New Zealand economy. So as the number of guests to New Zealand rises, the economy gets along nicely and the currency appreciates.

Highlights

• New Zealand used to utilize the British monetary configuration, which was pounds, shilling, and pence, until 1967, when it changed to dollar-based money.
• Starting around 1999, the New Zealand government has delivered polymer or plastic forms of the New Zealand dollar, which has made the note safer against forging.
• The New Zealand dollar went through a series of changes in a fixed exchange rate with the U.S. dollar until March of 1985 when the currency was permitted to unreservedly float.
• The New Zealand currency is known as the New Zealand dollar (NZD).

FAQ

What Is the Abbreviation for New Zealand Currency?

The shortening for the New Zealand currency is "NZD."

What Does New Zealand's Currency Resemble?

Every banknote and coin of New Zealand's currency appears to be unique. The currency for the most part has a bird on one side of a banknote or coin as well as an important historical figure of New Zealand. The currency additionally comes in extremely splendid tones.

Why Is the NZD So Strong?

The strength of a currency will in general change so the strength of the NZD may not necessarily in all cases be so. Nonetheless, overall, NZD is viewed as a stable currency due to the strength of the New Zealand economy and its outlook. The travel industry is a strong economic main impetus for New Zealand, so when the travel industry is doing great in the country, the currency will generally be stronger. Other economic factors, for example, growth rate, GDP, unemployment, and inflation are strong and, subsequently, lead to a strong currency.

Are New Zealand Dollars One of the Best Currencies To Trade?

NZD is quite possibly of the most traded currency in the world, making it a liquid currency in forex markets. New Zealand has a high FX turnover when compared to GDP due to international traders seeking yield, New Zealand having many companies and banks that are owned by international companies, bringing about currency swaps to limit FX risk, export and imports being a large part of the New Zealand economy, and in light of the fact that New Zealand companies and organizations borrow vigorously from international markets.