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NZD/USD Forecast Sep. 15-19

he New Zealand dollar was under the heavy hand of the US dollar once again, reaching new lows and even falling below the slippery downtrend support line. The major event of the week is the release of quarterly GDP. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

The US dollar dominated another week, shrugging off some unexciting data and advancing against the weak and strong currencies alike. The kiwi suffered from the central bank: the recent fall in NZD/USD is probably not enough for Governor Wheeler, which wants even more, as he stated in the press conference.

Updates:

  1. Current Account: Tuesday, 22:45. New Zealand enjoyed a current account surplus of 1.41 billion in Q1, breaking a streak of deficits. This time, for Q2, the country might slip back into a deficit, and this could weigh on the kiwi.
  2. GDP: Wednesday, 22:45. For three consecutive quarters, the economy grew at a pace of 1% or higher. In the first quarter, a quarterly growth rate of 1% was seen. Strong GDP growth was also behind the series of rate hikes. While growth probably continued in the second quarter, it probably slowed down to 0.6%.
  3. Visitor Arrivals: Thursday, 22:45. After commodity exports, tourism also plays a significant role int he economy, making the number of visitors important for New Zealand. A slide of 0.5% was printed in July, and a rise is likely this time.
  4. Credit Card Spending: Friday, 3:00. As retail sales are published only once per quarter, this measure of spending by consumers provides an indication about the state of the consumer and the economy. A y/y growth rate of 4.5% was seen in July, and we could see a slower growth rate now.
  5. Elections: Friday. Kiwis go to the polls amid a strong economy and solid leadership by Prime Minister John Key. According to recent polls, Key is in the lead and is expected to win the elections and form another minority government. An outcome of continuity and a decisive vote will be positive for the kiwi, while a political limbo would hurt the currency.

* All times are GMT.

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Asian currencies are being supported by Chinese economic stimulus

 

New Zealand election results are NZD positive – Sunday gap possible

Results are coming in from the parliamentary elections in New Zealand and the results show a victory for the National Party, giving Prime Minister John Key a third term in office. Markets like continuity and certainty as well as market oriented governments.

This was not unexpected, but the actual results could even be better: National is en route to win an absolute majority in parliament, with 61 out of 121 seats, making policy making easier, even if Key opts to form a coalition with a few small parties.

The victory comes on the backdrop of strong economic growth, as we just learned against last week with the release of the better than expected growth figures for Q2.

In his victory speech, Key was generous with his finance minister Bill English, and called him “the best finance minister in the developed world”. Another term in office for English alongside Key is another positive for markets.

NZD/USD had a tough time recently, falling on the desire of the RBNZ to see a weaker currency and the upcoming tightening in US monetary policy. The pair could enjoy a rebound, at least early in the week.

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NZD/USD Forecast Sep. 22-26

The New Zealand dollar dropped to new lows. Yes, once again. Can the bleeding stop now? Trade balance is the main event. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

Yet another week of dollar dominance hit the kiwi. The FOMC main some minor hawkish tweaks and that was enough to send NZD down, despite better than expected GDP growth. Can the better outcome eventually help the kiwi? Perhaps the elections will: the National party increased its hold in parliament and the markets certainly like this continuity.

  1. Westpac Consumer Sentiment: Sunday, 22:00. This quarterly survey of 1500 consumers has shown strong optimism in Q1, with 121.2 points. A small slide is expected for Q2, as the economy did not grow as fast as in Q1.
  2. Trade Balance:.Tuesday, 22:45. New Zealand’s trade balance for July disappointed with a turn to a larger than expected deficit of 692 million NZD. A much bigger deficit is expected now: 1.125 billion. The low expectations mean that a smaller deficit could benefit the kiwi.

* All times are GMT.

 

N.Z. Dollar Gains After Record Election Victory for Key

The New Zealand dollar climbed after Prime Minister John Key was returned to power in a record election victory, with his National Party promising tax cuts and a reduction in hurdles to business.

The currency, dubbed the kiwi, strengthened 0.3 percent to 81.52 U.S. cents by 8:22 a.m. in Wellington after closing at 81.32 cents Sept. 19. It slipped 0.3 percent last week in a fifth straight week of declines, the worst slump since May 2007.

Key’s National Party won 48 percent of the vote in the Sept. 20 ballot, securing the first single-party majority in New Zealand’s parliament since the country introduced proportional representation in 1996. The main opposition Labour Party had its worst defeat since 1922. The kiwi has gained more than 4 percent over the past three years, as economic growth quickened to the fastest pace since 2007 and the South Pacific nation’s central bank started raising interest rates this year.

“Key’s win will be a relief to offshore investors,” James Lindsay, a senior portfolio manager who oversees NZ$3.9 billion ($3.2 billion) of New Zealand assets for Nikko Asset Management Co. Ltd., said by phone from Auckland. “The policies of Labour and the Greens were seen as anti-investment, so we’ll see a wee bit of a relief rally.”

National won its highest proportion of the vote since 1951. Its vote tally compared with 25 percent for Labour and 10 percent for the Green Party, which will be the third-biggest party in parliament.

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New Zealand Trade Data Due On Wednesday

New Zealand will on Wednesday release August numbers for imports, exports and trade balance, highlighting a modest day for Asia-Pacific economic news.

The trade balance is expected to show a deficit of NZ$1.125 billion after posting a deficit of NZ$692 million in July. Imports are tipped to come in at NZ$4.45 billion, up from NZ$4.40 billion in the previous month. Exports are called at NZ$3.20 billion, down from NZ$3.70 billion a month earlier.

Australia will see July results for the Conference Board's leading index, plus August data for skilled vacancies. The leading index was up 0.4 percent in June, while vacancies added 0.9 percent on month in July.

Japan will see preliminary September figures for its manufacturing PMI from Markit Economics; in August, the PMI had a score of 52.2.

 

NZD/USD Forecast Sep. 29 – Oct. 3

The New Zealand dollar accelerated its losses and closed the week with a 3% drop well below 0.80 in one of the worst weeks ever. Business confidence is the main event this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

While New Zealand’s trade balance exceeded expectations with a smaller than expected deficit, there were stronger forces that hit the pair: the US dollar was storming across the board and commodity currencies were hit hard. When the kiwi was already down, RBNZ governor made a special statement saying the exchange rate, despite its recent fall, is still unjustifiable and unsustainable. He put fuel on the fire and this resulted in a terrible slide. Can the fundamentals of the New Zealand economy beat these words?

  1. Building Consents: Monday, 21:45. After a few months of volatility, this indicator of the housing sector ticked up by 0.1% in July. A similar figure is expected now.
  2. ANZ Business Confidence: Tuesday, 00:00. This highly regarded survey of 1500 businesses is on the decline since it reached a multi-decade low above 70 points back in February. After scoring 24.4 points in August, another slide is likely, but optimism (a score above 0), is likely to prevail.
  3. GDT Price Index: Wednesday. The Global Dairy Trade, or put simply, the price of milk,. is critical to New Zealand’s economy. After a series of falls in the past few months, the last auction resulted in no change in prices. The unexpected numbers and the unexpected timing make it a big market mover for the kiwi.
  4. ANZ Commodity Prices: Thursday, 00:00. Commodity prices have been sliding in the past 6 months, and no respite is likely now. The fall of 3.3% seen in August is expected to be followed by a more moderate slide.

* All times are GMT.

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N.Z. Dollar Plunges on Central Bank’s Intervention

New Zealand’s dollar was set for its biggest three-day drop since 2011 after the Reserve Bank said its currency sales in August were the most in seven years.

The euro rose from a 22-month low against the U.S. dollar as data showed German inflation beat economists’ estimates in September, while the greenback headed for its biggest monthly gain since 2012 as consumer spending in the U.S. rebounded in August. The kiwi slid against most of its 31 major peers as Prime Minister John Key was reported as signaling the currency needs to be weaker.

“Not only do you have the PM looking for a lower kiwi, you also have a larger-than-expected RBNZ transaction, showing they intervened at a larger capacity than the market was looking for,” Matthew Derr, a foreign-exchange strategist at Credit Suisse Group AG, said by phone from New York. “We do remain bearish on the cross.”

New Zealand’s dollar dropped 1.3 percent to 77.68 U.S. cents at 10:18 a.m. New York time. It slid as much as 2 percent to 77.09, the lowest since August 2013.

The euro gained 0.1 percent to $1.2696 per after falling earlier to $1.2664, the weakest level since November 2012. The dollar traded little changed at 109.36 yen after touching 109.75, the most since August 2008. Europe’s shared currency rose 0.2 percent to 138.84 yen.

The Bloomberg Dollar Spot Index rose 0.1 percent to 1,068.29. It was poised for the highest close since June 2010 and a monthly increase of 3.8 percent, which would be the biggest since May 2012.

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The Kiwi stays consolidated, but the downtrend is still intact.

 

NZD/USD Forecast Oct. 13-17

The New Zealand dollar managed to stabilize after the storms, but 0.80 still seems unreachable. The price of milk takes center stage now. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

Business confidence continues falling according to the NZIER Business Confidence number, that slid to 19 points. On the other hand, a sell off the US dollar resulting in the concerned FOMC minutes certainly helped NZD/USD..

  1. FPI: Sunday, 21:45. As an exporter of food, the Food Price Index makes a difference, even if it is recently overshadowed by the once per fortnight milk release, only happening this week.
  2. REINZ HPI: Tuesday or Wednesday. This house price index moved higher in August, by 1.1%, after three months of drops. All in all, prices of homes are not as steaming hot as they were beforehand, but the market is still moving.
  3. GDT Price Index: Wednesday. The Global Dairy Trade, or simply put, the price of milk has a huge impact on the economy of New Zealand. A fall of 7.3% was recorded last time, and it was painful for the kiwi. Some stabilization is needed.
  4. Business NZ Manufacturing Index: Wednesday, 21:30. This PMI like indicator stood on 56.5 points last month, showing solid growth, above previous levels. This optimism is expected to continue also in September.

* All times are GMT.

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