August 2, 2010
Are the bad times over for the Kiwi? After taking a huge dive on RBNZ’s dovish comments last week, the Kiwi managed to gain 18 pips against the dollar on better-than-expected economic data last Friday. NZDUSD ended the week at .7256, while EURNZD closed 106 lower than its open price at 1.7958.
The monthly building consents gave the Kiwi a boost when it printed a 3.5% increase after falling by 9.5% last June. This was taken as bullish since more building consents means more construction, which usually translate to more investment and employment opportunities.
Will the commodity prices due today at 3:00 am GMT signal more growth for New Zealand? Any figure higher than last month’s 1.2% decrease might be good for the commodity-related economy since higher prices can mean higher demand.
The quarterly labor cost index can also help the Kiwi if it prints higher than the first quarter’s 0.3% increase. The data is expected to increase by 0.4% during the second quarter, but a higher labor cost might signal more consumer spending.
The unemployment reports due on Wednesday at 10:45 pm GMT can also give us clues on possible increases in consumer spending. The unemployment rate is expected to increase to 6.2% after the first quarter’s 6.0%, but a lower figure might mean more demand for the currency. Good luck in your trading this week!
"The only cable I watch is the pound baby."