The kiwi pair shows strong positive moment against greenback today, while doing so the kiwi pair enjoys the upward moment amidst the weaker dollar. Today New Zealand’s Prime Minister Jacinda Ardern announced the South Island Pacific nation has clinched a historic Free Trade Agreement (FTA) with the United Kingdom. It eliminates tariffs on a wide range of goods as the UK seeks to expand economic links around the world following its exit from the European Union. It has agreed a free trade deal with New Zealand which it says will benefit consumers and businesses. Prime Minister Boris Johnson said the deal will cut costs for exporters and open up New Zealand’s job market to UK professionals.

The government believes this is a step towards joining a trade group like Canada and Japan. According to the government’s own estimates, the New Zealand deal alone is unlikely to boost UK growth. Overall, a small proportion of UK trade is made up of less than 0.2% in New Zealand. The Labor and National Farmers Association (NFU) said the deal could affect UK farmers and reduce food quality. Mr.Johnson and New Zealand’s Prime Minister Jacinta Ardern agreed to the deal in a video call on Wednesday after 16 months of talks. Taxes on UK goods, including clothing, ships and bulldozers, and on New Zealand goods, including wine, honey and kiwi fruit, will be eliminated.

The UK already has deals with many of the members, rolled over from when it was in the EU. But CPTPP membership would give it more access in terms of services and digital trade. The UK signed its first big post-Brexit deal with Japan last year and in June it also signed a draft agreement for a trade deal with Australia. Both countries, as well as New Zealand, are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP.

On the other hand Federal Reserve said on Wednesday that the U.S. economy continued to grow at a moderate pace from August to early October, but slowed in many areas due to supply chain disruptions, labor shortages and uncertainty surrounding the delta variation of the corona virus. Production grew moderately strong in most parts of the country, similar to truck and freight, the central bank said. Inflation continues to be a concern as prices rise significantly as demand for goods and raw materials increases in most districts. “There have been widespread reports of increased input costs in the industrial sector due to production shortages caused by supply chain disruptions,” the central bank said.

Separately, New Zealand Trade Minister Damien O’Connor said, “pre-COVID estimates also projected that New Zealand goods to Britain will increase up to 40 percent and that New Zealand GDP will benefit up to 970 million NZ dollars (699 million US dollars) due to the FTA.”

NZD/USD 4 Hour Chart:

Support: 0.7158 (S1), 0.7121 (S2), 0.7096 (S3).

Resistance: 0.7220 (R1), 0.7245 (R2), 0.7282 (R3).

Trade deal between UK and Newzealand favors the Kiwi. We expect a bullish trend for NZD/USD.