Daily Economic Commentary: New Zealand

[PipDiddy]

Fly, Kiwi, fly! The New Zealand dollar soared across the charts yesterday after the better than expected reports from the euro zone pumped up the risk appetite and boosted the demand for the comdollars. The Kiwi rocketed by 149 pips against the dollar at .7246 from its .7136 open price.

The disappointing consumer confidence reports didn’t even pause the Kiwi’s flight after July’s confidence report dropped by another 5.2% after June’s 3.2% decline.

Will the Kiwi continue to rise, or will it come back to the pip grounds? No reports are scheduled today, but the big reports across the forex world might heavily affect the demand for the Kiwi.

Stay tuned for that big EU stress test results coming up today! With all the speculations surrounding the event, the results just might make or break your trade of the month!

[PipDiddy]

It ain’t no party unless the Kiwi’s invited! Joining the rest of Friday’s winners was the Kiwi, which got a boost from a bout of risk-taking. NZDUSD rose 25 pips from its opening price to rest at .7271 for the week.

Without any economic reports from New Zealand, the Kiwi was a mere passenger in the risk sentiment bandwagon. Luckily, risk appetite was in the driver’s seat and drove it to a new six-day high against the Greenback.

This week, it looks like New Zealand will take the wheel once again, starting with the NBNZ business confidence report on Thursday. The report gave a reading of 40.2 last month, which suggests pessimism in the business sector. Remember, 50.0 is the score that separates optimism from pessimism. Will July follow up with an even more pessimistic reading and send the Kiwi tumbling? Find out at 3:00 am GMT!

Later that day at 9:00 pm GMT, the RBNZ will take center stage when it makes its interest rate decision. The central bank is widely expected to hike rates for the second time in a row, bringing benchmark rates to 3.00%. But weak inflationary pressures and modest growth could always cause the RBNZ to hold rates as is, and possibly sink the Kiwi in the process.

[PipDiddy]

“Ain’t no bear strong enough,” chanted the Kiwi as it pushed NZDUSD up the charts yesterday and earned itself a 91 pips against the dollar.

Risk appetite had investors rushing in to the Kiwi. But I wonder if it will stick around long enough to boost the currency until economic reports from New Zealand start coming in. Hmm.. What do you think?

Wednesday will be a big day for the Kiwi as the National Bank of New Zealand reports on the country’s business confidence and the Reserve Bank of New Zealand announces its interest rate decision. Make sure to keep that in mind. We may just see the Kiwi continue its flight up the charts!

[PipDiddy]

Oh, and it was so close! After tapping a six-month high against the dollar at its intraday high of .7367, NZDUSD ended the day 40 pips lower at .7327.

It seemed that Kiwi had to dance to the tune of the positive reports from UK and the euro zone since there was no data released from the country early this week.

But today is a big day for Kiwi because all the action from New Zealand will happen today! We’ll start off with the NBNZ Business Confidence report at 3:00 am GMT. Will it print better than June’s 40.2 index figure? Remember that a positive reading indicates optimism, and might be good for the country’s economic activity.

The trade balance report will also be released at 10:45 pm GMT. While trade surplus for June is estimated at 359 million NZD, down from May’s 814 million NZD, a better-than-expected figure is good for the export-related economy.

If those big reports aren’t enough to get you excited, check out RBNZ’s big interest rate decision at 9:00 am GMT! With the awesome way New Zealand was performing over the past month, many expect the interest rates to rise to 3.00% from last month’s 2.75%. Will RBNZ do it? Keep your eyes glued to the tube!

[PipDiddy]

All eyes were on the Kiwi late yesterday as the RBNZ was set to make its much-awaited interest rate decision. The central bank delivered with a 0.25% interest rate hike but the Kiwi still failed to perform, sending NZDUSD plummeting from .7327 to .7284.

Investors got their rate hike but they were still unhappy? What gives??
Well aside from the fact that the increase was already widely expected, RBNZ Governor Alan Bollard gave discouraging words when he basically shot down the idea of rate hikes in the near future. What a party pooper!

Adding insult to injury was the June trade balance figure which came in at a surplus of 276 million NZD. This number is not only short of expectations of a 368 million NZD surplus, but is also a humongous drop from the previous month’s surplus of 814 million NZD. Ouch!

Maybe today’s building consents data will bring good news. Kiwi bulls might finally catch a break if the June figure can mark a significant improvement from the 9.6% decrease in the number of new building approvals seen in May.

[PipDiddy]

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!

[PipDiddy]

The Kiwi has got it goin’ on with the bulls! NZDUSD opened the week at 0.7261 and rallied past the 0.7300 psychological handle. It peaked at 0.7342 before closing the day at 0.7330.

No news report came out from New Zealand yesterday, so my best guess would be thatthe currency’s 69-pip win against the Greenback was courtesy of risk appetite. So be on your toes for announcements that could cause a shift in the market’s risk sentiment as we still have nothing on tap for the Kiwi today. Good luck on your trades!

[PipDiddy]

“I’m takin’ it one pip at a time,” muttered the Kiwi as it gained 17 pips against the dollar yesterday and marked its fourth consecutive win against the Greenback.

There were no reports from New Zealand yesterday so my best guess is that risk appetite kept the Kiwi well above the 0.7300 handle.

Today we have labor data on tap. At 10:45 pm GMT, we’ll see how many New Zealanders joined the labor force during the second quarter. The market anticipates that the numbers weren’t as impressive as the previous quarter’s 1% growth, with only a 0.5% consensus. With this, the unemployment rate is seen to have increased to 6.3% from 6.0% in the first quarter.

Uh oh. It seems like analysts aren’t putting their two pips on New Zealand’s labor market. But they could be wrong. Let’s see if the Kiwi can make it five days in row! Good luck on your trades!

[PipDiddy]

Stop the press, hot news comin’ through! After ending the 60-pip range at .7352 against the dollar yesterday, Kiwi saw some action with New Zealand’s employment reports a few hours ago.

Too bad it went against NZDUSD, as the pair dropped by a whopping 58 pips 15 minutes after the reports were released. 15 minutes! That’s less than the time I take to brush my teeth!

Unemployment rate rocketed to 6.8% in the second quarter this year from 6.0%. Hmm, is this why RBNZ decided to take a breather on interest rate hikes? Low employment figures usually mean less consumer spending, but lower interest rates could keep businesses and employers happy enough to keep the economy chugging.

No other reports from New Zealand will follow the excitement today, but keep an eye out for the high impact events that could impact risk appetite, starting from the BOE and ECB’s interest rate decisions, to the US unemployment claims today at 11:00 am GMT to 12:30 pm GMT. Happy trading!

[PipDiddy]

The disappointing results of New Zealand’s employment report caused the bulls to scream out in frustration and let go of their Kiwi holdings. NZDUSD hit an intraday low of .7250 on the bad news, but the pair was able retrace some of its losses during the US session to end the day a couple of pips above the .7300 handle.

No data coming out of New Zealand’s economic calendar today, but that doesn’t mean volatility will be non-existent! Once the US session kicks off, buckle up your forex seatbelts because the NFP report will be published. This report has the tendency to move the market a couple of hundred pips in just a couple of minutes so if ya can’t handle the wild volatility, stay out!