The NZD/USD pairing is the ratio of US dollars (USD) that are the equivalent to one New Zealand dollar (NZD) in forex trading.
Investors looking to put funds into either NZD or USD should keep track of a number of factors if they wish to make a smart investment, not least of which is the respective state of each countries' economy.
A range of factors can impact on the relative strength of each currency, with the US' position as the largest global economy making the nation's currency particularly sensitive to news relating to financial markets and economic developments both within the US and overseas, especially relating to its major trading partners in the eurozone and Asia.
The US economy is a major exporter of goods and USD can be affected by positions in global commodities trading, with the country being a major exporter of articles including precious metals, oil and petroleum, high-tech services and components, industrial supplies and much more.
However, commodities are not the only factor influencing USD, as the US is a manufacturing powerhouse - delivering 18 per cent of the world's manufacturing output. As a result, labour statistics and other production data can influence the currency's value.
In addition, the US agriculture sector is increasingly important to the country's continuing global dominance, with the US responsible for 50 per cent of all worldwide grain exports.
New Zealand is also a country rich in natural resources and is a major exporter of goods including timber, meat, fish, fruit, wool and dairy items, and as such, commodity trading can also have a significant impact on the value of NZD.
In 2010, USD was the most-traded global currency, accounting for a daily share of 84.9 per cent of all transactions. Conversely, NZD made up just 1.6 per cent of forex activity and ranked as the tenth most-traded currency in the world.
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