Nzdusd - page 23

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Good ideas to put into practice, very good info.

 

NZD/USD: Kiwi Boosted by Strengthening Fundamentals

The so-called kiwi flew higher on Wednesday, with several key fundamentals acting in the currency's favor.

Traders woke to news that dairy prices were up some 10.9% overnight at Fonterra's Global Dairy Trade (GDT) auction, the second consecutive increase at the auction. Prices of whole-milk powder, the most important commodity for New Zealand, gained 12.1% at the auction to sell for $2,078 per metric tonne.

Added to the good news for New Zealand, Chinese equities swung into positive territory after a few hours of trading deep in the red on Wednesday morning. The Shanghai Composite Index gained 0.31% to trade at 3,176.34 points just before midday in China.

The NZD/USD pair traded 0.56% higher at $0.6360 on Wednesday afternoon in Wellington, rising from $0.6325 where the cross closed in New York on Tuesday, and off an intraday low of $0.6311.

The New Zealand dollar also gained 0.25% on the Australian currency, with the AUD/NZD cross trading at $1.1049 on Wednesday after data showed the Australian economy growing at a slower pace than expected last quarter.

The currency's commodity-linked status also likely provided some support on Wednesday, with oil futures making reasonable advances early on.

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Good posts, keep the thread active, very helpful for all types of traders.

 

NZD/USD Forecast – Sep. 7-11

The New Zealand dollar continued struggling in the face of the global sell off. And now, the ball is in the court of the RBNZ. Will we see another rate cut? Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

New Zealand’s main export, milk, enjoyed another boost from the Global Dairy Trade: a rise of 10.9% followed the previous rise and was encouraging. However, business confidence continued dropping and the global stock sell off continued hurting the kiwi.

  1. Manufacturing Sales: Monday, 22:45. This quarterly indicator fell in the past 4 quarters, with a bigger slide of 2.8% in Q1 2015. While the indicator is lagging, it provides a wide picture of the economy. Another drop is on the cards now.
  2. Rate decision: Wednesday, 21:00. The Reserve Bank of New Zealand cut the rates in the past two meetings. At the current level of 3%, there is still more room for cuts to support the economy. But is it really necessary with the big fall in the value of the kiwi? Perhaps it has fallen enough and it is better to maintain the tools in the shed? Or perhaps the ongoing deterioration in commodity prices supports further cuts now. Markets expect the RBNZ cut once again to 2.75%. The event is accompanied by a statement and a press conference by Governor Graeme Wheeler.
  3. Business NZ Manufacturing Index: Thursday, 22:30. This PMI like indicator stood on 53.5 points in July, reflecting OK growth. A tick down is on the cards now.
  4. FPI: Thursday, 22:45. The Food Price Index helps assess the situation in New Zealand’s key exports, but it is somewhat overshadowed by the GDT auction. After a rise of 0.6% in July, we can expect a drop in August.

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Early heads up for NZD traders - RBNZ this week ... Everyone expects a cut!

A New Zealand survey of economists have all of them expecting an RBNZ rate cut this week

  • All of the economists surveyed by Mortgagerates.co.nz expected an interest rate cut of 25bps, which would take the OCR to 2.75%.

    • I'll have a preview up as we approach (the announcement is due Thursday, 9am local time

  • Which is Wednesday 2100GMT
  • RBNZ Governor Wheeler will start his press conference 5 minutes later
 

RBNZ: Cuts rates by 25bp, as expected

Reserve Bank of New Zealand announcement

  • says some further easing seems likely
  • Says further NZD depreciation is appropriate

    • (ps. You may recall the guy who said

    On the currency, the RBNZ is likely to mention its fall favourably. Inflation is low in NZ. Ordinarily a falling currency should impact to increase inflation, but this has not been a problem for the RBNZ. There is thus a risk that they again 'jawbone' the currency lower. If a lower currency results in building inflation pressures, it would not be unwelcome by the bank, so the risk for trash talk on the NZD is high

    Woo hoo!)

    So, that brings the OCR to 2.75%

  • Easing will depend on flow of economic data
  • Cuts q1 2016 annual GDP growth forecasts to 2.2% (from 3.3%)
  • Sees inflation reaching 2% in Q3 2016 vs. Q4 of 2016
  • Cuts warranted by softer eco data, need to keep CPI near 2%
  • Says NZ economy growing at annual rate around 2%
  • Says Canterbury construction plateau, activity has slowed
  • Says weakening business and consumer confidence

Quick headlines via Bloomberg

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NZD/USD: Kiwi Gets Some Light Relief After RBNZ Battering

The kiwi received some support on Friday after suffering a 1.65% dive on Thursday after the Reserve Bank of New Zealand's (RBNZ) rate decision and dovish comments.

As expected the RBNZ cut rates to 2.75% but it was the dovish commentary from the bank which hit the kiwi yesterday. The bank still sees the New Zealand dollar as overvalued and signaled further monetary easing to come in the near future.

A manufacturing release overnight helped to provide some much need relief to the kiwi. The BusinessNZ Performance of Manufacturing Index (PMI) rose to 55 in August from 53.7 previously.

The NZD/USD pair was trading 0.29% higher at $0.6305 following the numbers and ahead of the European session, down from the overnight high of $0.6319, as traders possibly looked to lock in some profits. The kiwi was the worst performing major on Thursday.

Furthermore, US jobs data on Thursday also worked against the kiwi as initial jobless claims produced another strong reading, with 275,000 Americans filing for unemployment benefits for the week ending September 5. The gauge previously registered 281,000.

Today's calendar is likely to provide some incentives, with the US Producer Price Index due before the US open, while the University of Michigan will release its consumer sentiment gauge later in the afternoon. However, traders are now starting to eye next week's Federal Open Market Committee meeting which will see the all-consuming September rate hike debate finally put to bed.

Important data is also due out of China this weekend, which could affect the pair, especially as China is a major trading partner for New Zealand, particularly its dairy sector.

 

NZD/USD forecast for the week of September 14, 2015

The NZD/USD pair tried to rally during the course of the week, but found far too much in the way of resistance above to continue going higher. The result was a shooting star, in the suggests that we are in fact going to have to continue going lower and test the bottom of the hammer from a couple of weeks back. With this, we have no interest in buying, but quite frankly we feel that the market is probably be volatile and have to be traded off of short-term charts.

 

NZD/USD Forecast – Sep. 14-18

The New Zealand dollar tried to recover but was hit by the RBNZ. Apart from the bi-weekly GDT auction, the all important GDP release stands out. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

The central bank not only cut rates but hinted about more cuts to come. In addition, it maintained its worries about the currency’s strength despite the big falls seen of late. This doesn’t bode well for the kiwi. In the US, we had positive job numbers coming from JOLTs alongside worrying consumer sentiment.

  1. GDT Price Index: Tuesday, during the European afternoon. The Global Dairy Trade, aka the price of milk, has a critical role in moving the kiwi for quite some time. While changes in prices of dairy products are often large, the publication always rocks the kiwi. After 10 consecutive falls, prices have rebounded nicely in the past two auctions: 14.8% in mid August and 10.9% in early September. Will we see an ongoing recovery?
  2. Current Account: Wednesday, 22:45. New Zealand enjoyed a surplus of 0.66 billion in Q1, breaking a losing streak of 3 straight deficits. However, given the shaky trade balance numbers, a return to a deficit cannot be ruled out for Q2: -1.51 billion is on the cards.
  3. New Zealand GDP: Wednesday, 22:45. After growing strongly in 2014, the growth rate in Q1 2015 was a disappointing 0.2% q/q, reflecting the beginning of the global slowdown. Q2 is not expected to be much better, but growth is expected to continue. In Australia we have already seen a slowdown and Canada is in recession, but New Zealand’s agricultural dependency is likely to spare its economy from outright recession. A growth rate of 0.6% is expected.

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NZD/USD: Kiwi Consolidates, Tries to Erase Post-RBNZ Losses

The US dollar was trading on a weaker footing on Monday, easing broadly against its major peers. The NZD/USD pair was seen around $0.6330, marginally higher on the day.

The kiwi has erased half of the losses suffered last week, when the Reserve Bank of New Zealand lowered the official cash rate by 25 bps to 275 bps.

Traders are anxiously waiting for Thursday's monetary policy decision, but the Federal Reserve (Fed) is not expected to raise rates, according to the latest data from the Fed funds futures. The action will likely come later in the year, most likely in December.

"Market participants remain comfortable that the Fed will not begin to raise interest rates this week. The likelihood of a 0.25 percentage point rate hike is currently discounted at around 1 in 4 probability which has been moving gradually lower over the last month. We also expect the Fed to remain on hold this week but see it as a closer call," analysts at Bank of Tokyo-Mitsubishi wrote on Monday.

The technical analysis says the pair is seen in a bullish triangle, with traders advised to await a clear breakout to either side.

From the kiwi perspective, the only macro news this week is the current account for Q2, which is expected to fall sharply, from N$0.662 billion to -N$1.5 billion, but should not cause any significant volatility on the pair. These figures will be followed by GDP for Q2, which should improved from 0.2% to 0.6% quarter-on-quarter and tick lower from 2.6% to 2.5% yearly.

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