Can you buy New Zealand dollars? Analyzing the current investment situation and future trend of the New Zealand dollar

**Is the NZD still worth investing in?**

The performance of the New Zealand dollar (NZD, code NZD) over the past few years has indeed been disappointing. After reaching a high of $0.88 in 2014, it has now fallen to around $0.50, a depreciation of nearly 32%. Many investors are asking: Can I still buy NZD now? Is there still an opportunity in the future?

## Why has the NZD been declining steadily?

To understand whether the NZD is a good investment, we need to first understand why it has been falling.

**The fate of commodity currencies**

Both the NZD and AUD are classified as "commodity currencies," and this is not just talk. The economies of New Zealand and Australia are highly dependent on commodity exports—New Zealand mainly relies on agricultural products, dairy, and wool, which account for over two-thirds of exports. When commodity prices decline, these currencies tend to weaken naturally. Conversely, when global demand for commodities is strong, these currencies tend to rise.

**Economic recession drag**

Post-pandemic global economic adjustments have hit New Zealand’s export-dependent economy hard. Coupled with the ongoing sluggishness of the tourism industry (another pillar of New Zealand’s economy), the overall economic outlook is bleak, making it difficult for the NZD to perform well.

**US dollar interest rate hikes pressure**

The Federal Reserve’s continued rate hikes have widened the interest rate gap between the US dollar and the Reserve Bank of New Zealand. Investors prefer holding high-yield USD assets, leaving the NZD relatively sidelined, which further depresses its exchange rate.

**Global sudden events**

Any major global event—from pandemics to geopolitical tensions—can directly impact New Zealand’s trade and thus drag down the NZD’s performance.

## What does the future hold?

According to forecasts from major investment banks, the NZD/USD may weaken further in the short term. Projections show:
- In six months, it may reach 0.594
- Within one year, around 0.5934
- In two years, approximately 0.5885
- In three years, about 0.5834

This indicates that the NZD faces long-term bearish risks, but these forecasts are not absolute. Policy adjustments, commodity price rebounds, and improved global risk appetite could all change the trajectory of the NZD.

## Ways to invest in the NZD

If you want to get involved with the NZD, there are mainly four options:

**1. Bank fixed deposits**

This is the safest method. Exchange TWD to NZD at the current bank’s posted rate and deposit as a fixed-term deposit. Upon maturity, convert back at the new exchange rate. The advantage is minimal risk and simple operation, but the returns are modest, and exchange rate fluctuations limit gains.

**2. Forex funds**

Managed by professional fund managers, these track NZD or related forex assets. They carry higher risk and potential returns than fixed deposits, suitable for investors seeking professional management without direct trading.

**3. Forex futures**

NZD futures can be traded on international exchanges (such as CME), with the code NE. Futures allow leverage and two-way trading but also entail higher risks, including the possibility of margin calls. Minimum tick size is 0.0001, with a minimum value of $10. Settlement is required at expiration.

**4. Contracts for Difference (CFD)**

In recent years, CFDs have become increasingly popular. Compared to futures, CFDs require less margin and offer higher capital efficiency, enabling "small investment for big gains." They have no delivery date restrictions, can be held long-term, and support two-way trading. For commodity currencies like the NZD, which are relatively predictable, CFDs are especially suitable for short-term swing trading.

## Should you buy NZD now?

**Investment logic**

The investment opportunity in NZD depends on several factors:
- Commodity price rebounds (if international agricultural and dairy prices rise, NZD will appreciate)
- Improvement in global risk appetite (when markets are optimistic, investors are willing to hold high-yield assets, benefiting NZD)
- Shift in Fed policy (if the US interest rate hike cycle ends, narrowing the US-NZ interest rate differential, NZD may have a breather)

**Risk warning**

Entering the NZD market now requires acknowledging some realities:
- Short-term economic fundamentals may not improve significantly
- The US dollar remains a safe haven during global liquidity tensions
- Commodity price volatility may continue to trouble the NZD

## Final advice

Whether you can buy NZD now depends on your investment horizon and risk tolerance. If you are a long-term investor believing that the global economy will eventually rebound, current lows might present an opportunity. If you are a short-term trader, risk management becomes crucial—consider using CFDs with stop-loss orders and two-way trading to capture volatility.

Regardless of the method chosen, the key is to keep an eye on Federal Reserve moves, New Zealand Reserve Bank policies, and global commodity trends, as these factors directly influence the future of the NZD.