When we are looking at the supply and demand for NZD in the foreign exchange market, why do we label the price axis as "USD/NZD"? Why it is USD per NZD rather than NZD per USD?

In the foreign exchange market, the currency pair is always quoted in a specific order, known as the "base" and "quote" currency. The base currency is the first currency in the pair, and the quote currency is the second. The exchange rate displayed is how much of the quote currency is needed to buy one unit of the base currency.

In the case of USD/NZD, the base currency is USD and the quote currency is NZD. This means the exchange rate shows how many New Zealand dollars are needed to buy one US dollar.

However, when we are looking at the supply and demand for NZD, we are interested in how the value of NZD changes relative to USD. Therefore, we flip the currency pair to NZD/USD. This means the exchange rate now shows how many US dollars are needed to buy one New Zealand dollar.

So, when we label the price axis as "USD/NZD", we are showing the value of the NZD in terms of USD. This allows us to see how the supply and demand for NZD affects its value against the USD.