The New Zealand Dollar was first introduced to the forex market in 1967 to replace the New Zealand Pound and ever since then has been heavily influenced by movements in the US economy.
This has a substantial impact on the volatility of the pair, with NZD benefitting from a weaker US economy and vice versa. When deciding how to trade this pair, therefore, it pays to look ahead at the policy announcements coming from the US. If you’re expecting good news on the economic USD is likely to gain against the NZD. At the same time USD can benefit when New Zealand’s economy stutters, particularly when it comes to exports.