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Kiwi

The New Zealand dollar, named after the bird on the one-dollar coin, and the pair NZD/USD.

The kiwi behaves like a smaller, less liquid aussie. Dairy prices, Chinese demand and Reserve Bank of New Zealand policy drive it, and its correlation with AUD/USD is usually high enough that holding both is close to doubling one position.

Lower liquidity shows up as slightly wider spreads and sharper moves during the asian-session, and as poor fills around data releases.

Example: AUD/USD and NZD/USD have a 30-day correlation of 0.9. A trader long one standard-lot of each believes they hold two positions but has roughly the risk of 1.9 lots of a single one. See currency-correlation.

Related: aussie, currency-nickname

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