Daily Economic Commentary: New Zealand

[PipDiddy]

The Kiwi was speeding on the fast lane up to its intraday high at .7530 when its rally came to an abrupt halt. Then, sha-bam! It was all downhill for NZD/USD, closing the day 12 pips lower at .7482.

So what caused the Kiwi to be the only one among the comdolls to lose against the greenback?

Word on the street is that the dovish comments of RBNZ Governor Alan Bollard during the bank’s rate statement on Wednesday still weighed down the currency.

Ah, and giving our mates in the RBNZ one more reason to push rate hikes further down their calendars could be the food price index for November. Earlier today we saw that prices of food and food services during the month fell by 0.6% after posting a 2.2% increase in October.

Hmmm, I wonder if the retail sales report for October will provide the Kiwi with some support on the charts. For a comeback to happen, we’re gonna have to see a figure better than the 0.8% decline that the market is anticipating. Make sure you don’t miss the report later at 9:45 pm GMT!

[PipDiddy]

Whew! The Kiwi got away with New Zealand’s less-than-awesome economic reports yesterday when a solid round of risk appetite boosted the comdolls. NZD/USD peaked at an intraday high of .7577 before settling to 81 pips above its open price at .7552.

New Zealand’s retail sales dropped by 2.5% in October after clocking in a 1.7% growth in September. Meanwhile, sales excluding automobiles also disappointed with a 1.6% fall.

Apparently, consumers went on a shopping spree in September right before the Goods and Services Tax (GST) was increased on October 1. It weighed on 10 out of 15 industries in October, and dragged the retail report lower.

No economic report is on tap today to follow up on those disappointing figures, but keep close tabs on comdoll trading to see if the Kiwi can gain on the dollar for another day!

[PipDiddy]

Mirror mirror on the wall, who’s the weakest comdoll of them all? With a 34-pip loss during yesterday’s trading, I bet your creepy, talking mirror will say that it’s the Kiwi. NZD/USD tumbled to its closing price at .7517 after it rallied to an intraday high of .7576.

October’s worse-than-expected retail sales report, which posted the largest decline in consumer spending in 13 years, came back to haunt the currency after the market seemed to have shrugged off the -2.5% reading on Monday.

Stay tuned for the Business NZ Manufacturing Index for November later at 11:30 pm GMT and see if it will be able to make the comdoll look pretty to traders. A 50.0 reading or higher would probably be bullish for the currency as this would indicate expansion in New Zealand's manufacturing sector. Not to mention that it would be more awesome that its 49.7 reading in October.

[PipDiddy]

Being one of the biggest losers against the dollar in yesterday’s trading, the Kiwi definitely didn’t feel so fly like a G6. It ended the day at its 2-month low at .7381 suffering a whopping 138-pip loss. Ouch!

So what got traders dumping their Kiwis?

Word on the street is that it was because of the Westpac Consumer Confidence report for the fourth quarter which printed its lowest reading since July 2009 at 108.3!

This might have upset the market so much that not even a positive manufacturing report was enough to convince traders to show the Kiwi some love. It was also reported yesterday that the Business NZ PMI for November was higher at 52.7 than its previous reading of 50.0, which was upwardly revised from 49.7.

Perhaps Kiwi investors might have gotten tired of seeing reports from New Zealand disappoint one after another.

See if today's lineup will help the Kiwi on the charts. At 2:00 am GMT, the RBNZ will release the results of its own business confidence survey for December. Watch out for reading higher than its previous 33.2 figure in November as this could spur the currency into a rally!

[PipDiddy]

It’s a tie! The Kiwi ended in a near draw against the Greenback yesterday despite the release of worse-than-expected economic data in New Zealand. NZD/USD reached its intraday levels at .7344 and .7407 before settling down with a 2-pip gain.

The Kiwi managed to pull a fast one on the Greenback despite the National Bank of New Zealand’s report that local businesses became less optimistic on their sales and profits for the next 12 months. The NBNZ business outlook report slipped from 33.2 in November to its 29.5 index figure in December. The report also showed that confidence was high in the retailing and manufacturing sectors, but down in agriculture, construction, and services.

No other reports are due for release this week, but keep an eye out for any economic reports that might affect comdoll trading!

[PipDiddy]

Relatively tight trading for the Kiwi, which didn't move too much over the latter half of last week. NZD/USD traded within a range of 75 pips last Friday, ending the day just 10 pips below its opening price. Could we see more of the same this week?

Seeing as how its a shortened week, we may not see any big moves this week. However, take note that current account and GDP figures will be released on Tuesday and Wednesday respectively. The current account report is expected to print a deficit of 2.33 billion NZD, while the GDP report is predicted to come in at quarterly growth of 0.1% for the 3rd quarter.

With the lower liquidity, any divergence from expectations could send the Kiwi in any direction, so be careful!

[PipDiddy]

Taking cue from its comdoll sibling, the Kiwi rose up the charts and posted some decent gains against the dollar in spite of the tight trading we saw yesterday. NZD/USD finished 55 pips higher to finish trading at .7418. Could this set the tone for the rest of the shortened week?

Clearly, yesterday’s move was driven by stronger sentiment towards higher yielding currencies like the AUD and NZD. Notice the divergence on other currencies like EUR and GBP, which didn’t exactly hold their own against the dollar yesterday. Could this be a recurring theme in 2011?

For today though, watch out for any reversals, especially since we could have a catalyst on our hands in the form of current account data at 9:45 pm GMT. Word on the street is that the Kiwis posted a deficit of 2.23 billion NZD during the 3rd quarter, indicating weaker trade. If this report were to post a larger than expected deficit, could it spell doom and gloom for the NZD?

[PipDiddy]

Facepalm! The Kiwi gave up most of its gains against the scrilla yesterday when mixed economic reports showed up in New Zealand. NZD/USD soared to an intraday high of .7484 before it dropping to its .7430 closing price.

Credit card spending showed a weaker growth in November at 3.8% after clocking in at 4.6% in October. Meanwhile, the country’s current deficit widened to 1.77 billion NZD, but not as much as the expected deficit of 2.27 billion NZD.

Let’s see if New Zealand’s economic data can wow the markets this time around when the GDP for the third quarter is released at 9:45 pm GMT. Market junkies are expecting a 0.1% growth from the second quarter’s 0.2% figure, but a higher figure just might give the Kiwi bulls an early Christmas present.

[PipDiddy]

Say what?! The Kiwi bears partied in the pip streets yesterday when a report showed that the New Zealand economy surprisingly contracted in the third quarter. NZD/USD gave up 7 pips all the way to .7422 after it reached an intraday high of .7451.

New Zealand’s GDP surprisingly contracted by 0.2% in the third quarter after rising by 0.1% in the second quarter. Aside from weaknesses in the primary and goods-producing industries, the big earthquake that the country experienced earlier this year also took its toll on the economic growth. Good thing that the annualized figure remained in the positive territory at 1.4%.

No other report is scheduled from New Zealand this week, but don’t take your eyes off other economic reports that might affect comdoll trading!

[PipDiddy]

Now that’s how you end the year with a bang! The last week of 2010 saw NZD/USD climb about 400 pips as the pair shot up in response to USD weakness. The question now is whether this strong rally will carry over into 2011.

With many New Zealand bankers out on vacation for most of last week, the Kiwi didn’t have much to move and groove to domestically.

The big move in NZD/USD was helped largely by the common belief that the global economy will be showing more signs of recovery in 2011. Way to look on the bright side, eh?

But all this optimism isn’t just because people were feeling the holiday spirit. It has solid fundamental backing. China, one of New Zealand’s largest trading partners, is expected to give the global growth a big boost this year. As a result, commodity prices have been picking up, taking the comdolls along for the ride.

Unfortunately, it looks like we’ve got another snoozer on our hands this week as no reports are scheduled for release again! Action may continue to be slow as market players trickle back into the markets this week. But as always, there will be opportunities to make pips. So stay sharp and let’s start this year right!