NZD/USD Trade Tactics.

Strong economic reports from New Zealand result in an appreciation of the NZD so if there’s a good chance that an economic release could beat the consensus, it could be a sign to go long NZD/USD.

Weak economic reports, on the other hand, push the NZD down.

If an upcoming report is likely to come in weaker than expected, it could be a chance to short NZD/USD.

Aside from watching economic reports, taking note of commodity price behavior could also serve as an influence on  NZD/USD price action.

In recent history, commodity prices tend to surge when demand for riskier assets is also strong.

During these times, investors place their money in higher-yielding assets such as gold and other commodities and sell the lower-yielding U.S. dollar.

As a result, the commodity-based Kiwi gains strongly against the safe-haven US.. dollar.

On the other hand, when risk aversion forces investors to flee back to the safe-havens, the NZD edges lower against the USD.

Just like the AUD, the NZD is also a good candidate for carry trade.

Since carry trades involve buying a currency with high interest rates and selling a currency with low interest rates, New Zealand’s relatively high interest rate provides support for the NZD.

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