29 Oct 2020 19:26
NZD/ZAR (New Zealand Dollar vs South African Rand)
The NZD/ZAR currency pair, which is the cross rate against U.S. dollar, is not a very popular one on the Forex market. There is no the U.S. dollar in this currency pair, nevertheless, the New Zealand dollar and the South African rand come under the enormous influence of it. To make it clear, just combine the NZD/USD and USD/ZAR charts, and you can get the approximate NZD/ZAR chart.
The U.S. dollar affects both currencies radically. So, for a better prediction of the future rate movement of this currency pair, you need to take into account the key indicators of the U.S. economy. There are such indicators as the GDP, Producer Price Index (PPI), unemployment rate, trade balance and many others. Remember that the above-mentioned currencies may respond in a different manner to the changes in the economic situation of the United States.
The New Zealand's major export industries are agriculture, horticulture, fishing, and forestry. Moreover, historically the country has been one of the world's largest exporters of wool. As you can see, New Zealand is heavily dependent on its agricultural production, the majority of which goes on export. The main trade partners of NZ are the U.S.A., Australia, and the Pacific Rim countries. Thus, you should stay tuned for the latest news, because any changes in the current state of affairs in these countries may reflect in the economy of New Zealand.
The South African rand is one of the most widespread currencies, which is used in many trading operations. The huge reserves of the mineral resources allow South Africa to be the richest country on the continent. Its economy is concentrated on mining with a further exportation of minerals. Moreover, one of the major stock exchanges that is in the top 10 the world's largest stock exchanges, is situated in South Africa.
South Africa specializes in extraction of precious stones and metals, including gold and diamonds. Since the country is the leading car manufacturer in Africa, the majority of its products go on export. As you can see, South Africa does not suffer from the shortage in raw materials. Among the factors which can affect the rand rate are prices for precious gems and metals as well as level of engineering production.
In comparison with the major currency pairs such as EUR/USD, USD/CHF, GBP/USD, and USD/JPY this one is relatively illiquid. Hence, when you make a forecast for the future rate of this financial instrument, you should primarily focus on those currency pairs that consist of the U.S. dollar in tandem with the New Zealand dollar and the South African rand.
Do not forget that the spread for the cross rates is generally higher than for more popular currency pairs. Thus, before you start dealing with the cross currency pairs, study properly the broker's conditions for this specified trading instrument.