Nzdusd - page 13
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New Zealand - Manufacturing activity (seasonally adjusted) for Q4: -0.7%
Manufacturing activity sales (seasonally adjusted) for Q4 of 2014: -0.7%
Manufacturing activity volume, Q4: +0.9%
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This is not normally a high impact data point from New Zealand ... NZD not much response.
Lets see if there is a breakout above the 0.7400 level on the Kiwi or if it continues going lower and visits the 0.7300 level, which could act as a good support level.
Good pullback on the Kiwi to the 0.7300 level, which could act as resistance.
NZ Factory-Sector Expansion Broadens in February
New Zealand's factory sector expanded at a better pace last month than in January, according to an industry gauge, adding to recent evidence that the economy remains in a steady growth phase, assisted by accommodative monetary settings.
The Business New Zealand Manufacturing index jumped to 55.9 in February from a revised 50.7 a month earlier, where a reading above 50 signals an expansion in activity, while a figure below 50 indicates contraction.
New manufacturing orders were at their highest level since November 2013, while deliveries recorded a September-2014 high. Employment and production were also both higher in February than January, while finished stocks moderated slightly.
Rate freeze
On Thursday the Reserve Bank of New Zealand (RBNZ) decided it was most prudent to keep the Official Cash Rate (OCR) on hold at 3.50%, and signaled that rates were likely to remain unchanged for some time as the bank tries to balance weak inflation against a growing economy.
"Our central projection is consistent with a period of stability in the OCR. However, future interest rate adjustments, either up or down, will depend on the emerging flow of economic data," RBNZ Governor Graeme Wheeler said a day ago, leaving the bank open to changing its mind on rates if necessary.
So far this year economic developments have been positive for growth, with dairy prices recovering some of last year's sharp losses, the housing market keeping up its recent strong pace, and consumer and business confidence holding at solid levels.
On the downside though, parts of the country have been hit by drought conditions which will lower dairy-export quantities this season, and the New Zealand dollar has risen on a trade-weighted basis in recent months, further damaging exporters' profits.
Still, the RBNZ is forecasting GDP growth of 3% in the year ending March 2015, and believes that the fall in petrol prices since last year will add to demand as purchasing power rises.
source
NZD/USD Forecast Mar. 16-20
The New Zealand dollar had a roller coaster week, suffering the might of the US dollar, but recovering thanks to its own strong fundamentals. Where is it headed next? GDP is the key event. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
The US dollar stormed the board, and sent NZD/USD below 0.72. However, upbeat words from the RBNZ sent the kiwi higher. The New Zealand economy is doing well. While the central bank remained neutral, they seemingly stopped complaining about the strength of NZD, and this also served as a signal to rise.
* All times are GMT.
The NZDUSD stays between the 0.7300 and the 0.7400 levels. Lets just patiently wait for it to come out of this range to have a more clear entry option.
NZ Current Account Gap Expands to 3.3% of GDP in Q4
New Zealand's annual current account gap widened in the final quarter as more company profits went to overseas investors and the goods surplus contracted.
The gap in New Zealand's broadest measure of trade narrowed to $3.19 billion in the October-December period from $5.01 in the third quarter, Statistics New Zealand said on Wednesday, coming in largely on par with forecasts. However, the annual deficit grew to $7.8 billion, or 3.3% of GDP, from 2.6% in the third quarter.
"Most of this quarter's increase in profits earned by foreign-owned companies in New Zealand was reinvested back into the company," Jason Attewell of Statistic New Zealand said on Wednesday. "In addition, companies were able to pay back more dividends to their overseas portfolio shareholders this quarter, reflecting growth in the New Zealand economy."
The increase in the annual deficit was largely due to a fall in the goods surplus, Statistics New Zealand said, with a large decline in dairy prices the main contributor. Dairy prices tumbled around 50% from a peak in February last year to December as global supply increased and demand from China waned.
The goods surplus contracted to $1.06 billion in the year-ended December 2014 from $3.06 billion previously.
This was partly offset by a growing services surplus, which measured $1.88 billion in the year-ended December 2014, up from $1.45 billion in the year-ended September 2014.
The primary and secondary income deficits were largely unchanged at $10.23 billion, and $543 million respectively.
New Zealand's net international liability position was $153.9 billion as of December 31 2014, an increase of $1.9 billion from position as of September 30 2014.
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The NZDUSD has found a good support at the 0.7300 level, a breakdown of that level may take the pair all the way to the 0.7200 level.
NZ Economy Expands 0.8% in Q4, Led by Retail
The New Zealand economy continued to growth at a solid pace last quarter, led by strong retail and accommodation spending, adding to signs that policy settings remain accommodative.
GDP growth moderated to 0.8% in the fourth quarter of 2014 from a revised 0.9% in the September quarter, Statistics New Zealand said on Thursday, which was in line with market forecasts and the Reserve Bank of New Zealand's (RBNZ) estimate given a week ago.
The year-on-year rate of growth in the economy accelerated from 3.2% to 3.5%, the highest rate since September 2007.
The expenditure measure of GDP grew at a steady pace of 1.1% in the December quarter, after the September quarter estimate was revised down from 1.3%.
In the October-December period, retail and accommodation spending rose 2.3% on the back of higher tourist spending, while rental, hiring, and real estate services were up 1.2% over the same period, led by a 20% surge in real estate services. Financial and insurance services were 1.1% higher in the fourth quarter than the previous three-month period.
Utility output partly offset these increases, sliding 2.5% over the last quarter, due largely to lower hydro-electric generation.
The overall size of the economy was around $240 billion last year, consisting of $135 billion of household spending, $45 billion of government expenditure, $55 billion of investment spending, and $70 billion worth of export receipts, minus $65 billion worth of imports.
Accommodative settings
The fresh figures underscore the health of the New Zealand economy during a period of weak inflation, accommodative interest rates, and high employment growth.
The economic climate is helping to drive consumption and keeping business confidence elevated, underscoring why the RBNZ deems the current settings of monetary policy appropriate for the time being.
A week ago, the RBNZ said it was likely to keep interest rates on hold throughout the forecast period, and said that the next rate move, either up or down, would depend on emerging economic data. Today's release cements the RBNZ's neutral stance.
One of the biggest concerns for the RBNZ, as pointed out last week, was around inflation expectations sliding. Usually in such a high GDP-growth environment inflation would be somewhat higher, however a steep fall in global fuel prices, weak global inflation, and the relatively high exchange rate has kept inflation in New Zealand subdued.
NZD/USD: Kiwi Crushed, Gives Up Previous Gains
The kiwi was trading deep in negative territory against the US dollar on Thursday as the huge spike above $0.7500 proved to be short lived. The greenback gained broadly against its major peers once traders digested Wednesday's major news from the Federal Reserve (Fed).
The FOMC removed the word 'patience' from the forward guidance vocabulary, however bank Chair Janet Yellen remained cautious saying, "just because we removed the word patient from the statement doesn't mean we're going to be impatient."
The kiwi dived 1.31% to trade at $0.7378 against the greenback, while the US dollar index rose 0.75% to 99.2850 points.
Dull US data
In the US, the macro calendar offered new labor and manufacturing data, however the impact on the cross remained slightly muted after Wednesday's major market mover.
Before opening bell in the US, initial jobless claims were reported to have risen to 291,000 in the week ending March 14, from 290,000 posted a week before, while the Philly Fed Manufacturing Index hit 5.0 points in March, a minor deterioration from the 5.2 recorded a month ago.
The Conference Board's Leading Indicators Index, measuring the overall economic health by combining ten indicators, stayed at 0.2% in February, after growing 0.2% in the previous month.
Meanwhile, the New Zealand economy grew 0.8% in the final quarter, easing a touch from a revised 0.9% expansion in the previous quarter, according to a report published yesterday evening. The year-on-year rate of growth in the economy accelerated from 3.2% to 3.5%, the highest rate since September 2007.
Technical analysis
A sharp spike was seen in the major crosses after the Fed completely destroyed intraday price action and technical levels. Most of the majors just rebounded from multi-month and multi years lows and possibly stopped out many short sellers in the massive squeeze.
As the downtrend persisted for such a long time without any significant correction move against it we are expecting that the first signs of a possible setback are beginning to form.
For kiwi, the spike was just fuel for the beginning phase of an intraday uptrend, as NZD/USD rebounded from lows at $0.72. The currency cross reached a two-week high at $0.7550 and technical oscillators reached extreme overbought conditions.
We are expecting that some form of mild correction will appear and kiwi will give away some of its gains before another appreciation next week.
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