Daily Economic Commentary: New Zealand

[PipDiddy]

Worse-than-expected data? That ain't a problem for the Kiwi yo! It was numbah one among the comdoll clique yesterday in gaining the most pips against the dollar. NZD/USD tapped its 5-week high at .7637 before ending the day 48 pips higher from its opening price at .7637. Boo yeah!

It was reported yesterday that building consents were back on the red again in February, erasing the 9.1% gain we saw in January. According to Statistics New Zealand, the number of building approvals issued during the month declined by 9.7%. Ouch!

So what fueled the Kiwi’s flight yesterday?

Some economic gurus say that Kiwi bulls have the Aussie to thank for. Remember that most of New Zealand’s exports go to Australia and so, the strong Australian dollar makes it cheaper to import from its neighbor. These giddy hotshots have their hopes up that further gains in the Aussie will sustain the demand for New Zealand’s products and consequently boost the Kiwi on the charts too.

I’m not sure if yesterday's comdoll numbah one will continue flapping its wings on the charts today though. It was reported earlier that confidence among businessmen tumbled in February to -8.7, following its 34.5 reading in December. Yikes! But who knows, maybe there will be enough risk appetite to go around and keep the Kiwi steady.

[PipDiddy]

Staying at number one ain't easy, huh? The Kiwi lost its spot on the comdoll scoreboard yesterday as it struggled to keep its gains against the dollar. NZD/USD dropped to a low of .7582 during the Tokyo session before rallying to close the day with a measly 4-pip win at .7631.

It might have been the negative reading we saw on the NBNZ Business Confidence report for March that dragged down the com-doll. As I mentioned yesterday, business confidence dropped to -8.7 during the month from 34.5 in February.

I guess all the negative data finally caught up with the Kiwi. I wonder if the 3.1% uptick in the third-tier manufacturing sales report for the fourth quarter of 2010, which follows a 0.1% increase in Q3 2010, will be enough to provide the Kiwi with some support on the charts. Err, I wouldn’t really keep my hopes up for that. It may be better for you to gauge market sentiment to help you with your Kiwi trades.

Be careful out there, okay? Remember that today is an NFP Friday and we could see some wild moves on the charts!

[PipDiddy]

The Kiwi’s win last Friday was simply effortless! It didn’t need any support from New Zealand data to forge a new two-month high against the Greenback. It kicked back, relaxed, and let rising commodities carry NZD/USD up from .7361 to .7669

No data from New Zealand, but once again, rising commodities drove the Kiwi and its comdoll brethren higher up the charts.

Aside from that, it also received a nicely-timed boost against the USD when Fed member William Dudley let out a few dovish remarks after the better-than-expected NFP report was released. According to Dudley (no relations to the WWE’s Dudley Boyz), he doesn’t see why the Fed should change its loose monetary policy even with the better-than-expected NFP results.

We won’t have much New Zealand data to work with this week... which means it's time to party!!! Psych! Y'all know that's not how we roll! The markets will always present us with opportunities to trade.

We've got a major report due to come out later at 10:00 pm GMT-- the quarterly NZIER business confidence report. Look for a Kiwi mini-rally to occur if results come in better than Q4 2010’s reading of 8. New Zealand’s economy has been shaky lately (remember the double-dip warnings?) and an improvement in business confidence would indicate optimism for the coming months.

[PipDiddy]

Up, up, here we… Bam! The Kiwi was looking to extend its winning streak against the dollar to five days when it got rejected at the .7700 handle. NZD/USD wasn’t able to hang on to its 7-week high at .7705 and closed the day at .7680 with a 6-pip loss.

Without any high-caliber economic report on tap, I guess it wasn’t much of a surprise to see the Kiwi take a break from its rally. The only data released yesterday was the ANZ Commodity Prices for March which showed that the global prices of exported commodities increased by 4.7% during the month after printing a 2.7% uptick for February.

I’m not sure if the Kiwi will be able to make a comeback in today’s trading though. Earlier, the highly-anticipated NZIER Business Confidence report for the first quarter of 2011 came in at -27 following the previous quarter’s reading of 8. Yikes! Remember that a figure below zero is taken to be a sign of pessimism.

According to the report, businesses were just overwhelmed by the bad vibes brought about by the 6.3-magnitude earthquake in Christchurch.

We don’t have anything left on tap on our economic calendar from New Zealand today so make sure you gauge market sentiment to help you with your trades. Take note that the comdoll usually rallies in times of risk appetite. Good luck!

[PipDiddy]

Just like Triple H, the Kiwi tapped out of joust against the dollar yesterday. The two currencies wrestled for pips all the way to an intraday high of .7724 before the dollar got the upper hand and pushed NZD/USD to close 3 pips lower from its opening price at .7676.

Perhaps it was the NZIER Business Confidence report that cost the Kiwi its win against the dollar. As I mentioned yesterday, the report showed that sentiment turned sour during the first quarter of 2011 as the ill-effects of the Christchurch earthquake sank in. The index printed at -27.0 following the 8.0 reading we saw in December.

We don’t have any major report listed on our economic calendar for both New Zealand and the U.S. today, so you may want to tune in to market sentiment and the commodity markets to help you with your Kiwi trades. Peace out!

[PipDiddy]

"Wheee!" yelled the Kiwi yesterday as it chalked up another new high against the Greenback. NZD/USD topped at .7808, 132 pips higher than its open price of .7676. Rock on, Kiwi!

New Zealand didn't release any big reports yesterday, which means that the Kiwi's rally was mostly a result of improved risk appetite in the markets. On top of that, commodity prices have been soaring like crazy, with gold and oil reaching fresh record highs. That's certainly great news for the comdolls!

There aren't any red flags on New Zealand's schedule for today, leaving risk sentiment and commodity prices as the main drivers of the Kiwi's price movement again. Bear in mind that a couple of monetary policy statements are on today's docket and these could have a huge impact on market sentiment.

[PipDiddy]

With a mini-wave of risk aversion hitting the market late yesterday, the Kiwi was unable to build on its nice rally the day before. Still, the losses were minimal as NZD/USD closed just 11 pips lower to end at .7788.

No economic data on deck today from New Zealand, but that doesn’t mean you can take off early for the weekend!

Make sure you keep an eye out for reports from other countries, as they could serve as catalysts for big moves in the market. In particular, keep an eye out on the U.S., as the countdown to a potential government shutdown has begun. Who knows how the markets will react to this! Good luck today playaz!

[PipDiddy]

Uh-huh, you know what it is! KIWI POWER YO! With risk appetite back in style, traders gobbled up the Kiwi and pushed NZD/USD up another 32 pips to close at .7819.

You don’t need economic data to convince traders to buy up the Kiwi! All you need is a bit of risk-taking, baby! Commodities and the comdolls were in demand last Friday as traders were willing to take risks with higher-yielding assets.

The only notable event for New Zealand this week is the REINZ HPI due later today. After printing in the red for two consecutive months, the index printed a surprising 2.3% rise in February. If March can manage to follow up with an uptick of its own, it could be enough to spur a mini-rally from the Kiwi.

[PipDiddy]

Easy come, easy go! Just as quickly as Kiwi buyers had swooped in to buy the Kiwi last Friday, they disappeared to abandon it yesterday! With commodities sliding back, the Kiwi lost support against the Greenback, causing NZD/USD to drop 33 pips to .7793.

Even with credit card spending rising by 0.5% in March, an improvement from the 0.4% growth in February, the Kiwi was unable to hit fresh highs against the dollar. Broad Greenback strength and a huge drop in oil prices double-teamed the Kiwi to hold it down.

Again, no heavy reports coming from New Zealand today. For now, it’s best you keep yourself in the loop with what’s happening in Libya. Word on the street is that Gaddafi accepted an African Union Peace Plan yesterday, which is what caused oil prices to falter. But the peace plan, which was designed to end the violence in Libya, was rejected by rebels because they want Gaddafi to resign as well.

It seems to me like Gaddafi is beginning to give in to his opposition’s demand. If he shows more signs of weakness (or if he resigns), it could help ease rising oil prices and spark a round of risk appetite that could send the Kiwi flying!

[PipDiddy]

Bada-bing, bada-boom! Even with no data on deck, the Kiwi managed to shake off some early losses to climb up the charts. After hitting an intraday low at 0.7745, NZD/USD climbed almost 100 pips to finish at 0.7835, enough for a 43 pip gain on the day.

The Kiwi’s rise was a little surprising, considering how we saw some waves of risk aversion in the markets. The IMF downgraded forecasts for the U.S. and Japan, while Japan also got hit with some earthquakes yesterday. Meanwhile, both U.S. stocks and crude oil prices fell as well.

You would think that the Kiwi, a comdoll that has been flowing to the beat of risk sentiment lately, would follow suit and drop. But nope, that’s not what happened! What a crazy market we trade in ain't it?!

No news on deck, but as usual, keep an eye out for data coming out from other countries, as any surprises may serve as a catalyst for Kiwi trading today.