Daily Economic Commentary: New Zealand

[PipDiddy]

Ain’t no stopping the Kiwi baby! Once again, NZD/USD soared, rising 72 pips to close at .8331, a new all-time high! Okay fine, it beat the old record by just a few pips, but hey, the fact that it’s at all-time highs should mean something!

As long as traders are feeling risky and get the urge to put their money in higher yielding assets, look for them to park their money in the Kiwi. It’s benefitting from a nice commodity bull run, as well as higher domestic interest rates. If the economy recovers well from the disastrous earthquake earlier this year, the New Zealand dollar could make a case as the top performing currency of the year award.

[PipDiddy]

After dipping to an intraday low of .8288, the Kiwi flew to its new all-time high against the dollar at .8371 in Friday’s trading. Now that’s a rocketeer right there! NZD/USD then ended the week just a pip lower at .8370 with a 39-pip gain for the day.

We didn’t have any economic report from New Zealand. Some market junkies say that the Kiwi was able to hustle some muscle primarily because of the dollar’s weakness following the disappointing NFP report for June.

With that said and given that our forex calendar is once again blank for economic data for the Kiwi, keep tabs on market sentiment to help you gauge which direction the Kiwi is headed in today's trading.

[PipDiddy]

Ouch! No thanks to another case of risk aversion, the Kiwi bulls experienced a massive beating yesterday. NZD/USD, after opening the week at .8363, fell to .8276 by the end of the U.S. trading session. That’s a painful 87 pip loss!

If you’re wondering why the market went into risk aversion mode again, don’t worry because I will tell ya! This time around, it seems that the market is afraid that the debt problems will spread to the weaker nations in the euro zone like Italy and Spain. These nations have very high debt and have been showing disappointing growth figures.

There weren’t any economic data released from New Zealand yesterday and we won’t be seeing any again today. This means that the Kiwi will probably be driven by data coming out of other major economies like the U.S. and euro zone. Check out the forex calendar to see which important you should keep an eye out for!

[PipDiddy]

Strike two for the comdoll! The Kiwi took another beating against the Greenback yesterday as traders continued to flock the low-yielding currencies on a bout of risk aversion in markets. NZD/USD ended up dropping to an intraday low of .8109 before it leveled off to only a 93-pip loss at .8184. Yikes!

So what’s up with the Kiwi hatin’? Well, to make the Kiwi bulls feel better, it wasn’t just the Kiwi that took a hit yesterday. Heck, all of Happy Pip’s comdolls weakened against the Greenback! And to think Canada and Australia even released positive economic reports. Apparently, debt contagion concerns in the euro zone is just too strong for the currency bears to ignore.

Let’s see if the Kiwi bulls get their mojos today when New Zealand releases its quarterly GDP report at 10:45 pm GMT. Market geeks are expecting the data to inch 0.3% higher in the first quarter, but make sure you prepare for any surprises, aight?

[PipDiddy]

“Eat my dust, dollar!” Amid the broad dollar weakness, the Kiwi skyrocketed to a high of .8386 before ending the day with a 173-pip gain at .8355.

Aside from Fed Chairman Ben Bernanke’s remarks about the possibility of QE3, it also helped that China’s GDP report for Q3 2011 came in as expected at 9.5%. Remember that comdolls usually rally on positive data from China as it accounts for the majority of export demand of New Zealand.

To make things even better for the Kiwi, New Zealand’s GDP report for the second quarter of the year came in at 0.8% while the market only expected a measly 0.3% uptick. The Q1 2011 reading was also revised up to 0.5% after being initially reported at 0.2%. Boo yeah!

Hmm, I wonder if the positive figure will be enough for the Kiwi to chill around its new all-time high at .8507 in today’s trading. Keep tabs on market sentiment to find out! Keep in mind that the Kiwi usually rallies when risk appetite picks up.

[PipDiddy]

Thanks to a very impressive GDP report, the Kiwi was able to make significant advances versus other major currencies yesterday. NZD/USD, after opening the Asian trading session at .8361, rose as high as .8506. It retraced its gains as the day went on though, closing the day at .8411 for a decent 52-pip gain.

New Zealand, according to the GDP report, grew by 0.8% during the first quarter of this year, significantly higher than the 0.3% increase the market expected. This gave the market reason to believe that the Reserve Bank of New Zealand could raise rates in their next meeting.

No data coming out of New Zealand today, so don't expect to see the same amount of volatility as yesterday. Keep a close eye on upcoming U.S. data though (CPI at 12:30 pm GMT and University of Michigan consumer sentiment survey at 1:55 pm GMT), as they could indirectly affect the Kiwi's price action.

[PipDiddy]

Charlie Sheen, is that you? The Kiwi tacked another “winning” day against the Greenback last Friday with NZD/USD capping the day with a 57-pip gain at .8464 after hitting an intraday low of .8380 during the London session.

It seems that the currency bulls just couldn’t get enough of the Kiwi! No economic report was released from New Zealand last Friday, but remember that the country had already printed a better-than-expected GDP report early in the week. Of course, a strong Chinese GDP also released early last week didn’t hurt the comdoll bulls.

Speaking of strong reports, New Zealand has just released its CPI figures for the second quarter. As the report showed, New Zealand’s CPI climbed at an annualized rate of 5.3%, a 21-year high, as fuel, food, and power prices rose in the quarter. Meanwhile, the headline figure clocked in at 1.0% from the first quarter’s 0.8%. Does this mean that we’ll soon see the RBNZ take center stage at interest rate hike speculations?

Looks like we’ll have to wait a bit longer, kids. You see, no other economic data will be released from New Zealand this week. Nevertheless, keep close tabs on the Kiwi’s price action! We never know when the Kiwi bears wake up from their hibernation.

[PipDiddy]

NZD/USD moved sideways yesterday thanks to the lack of economic data from New Zealand. The pair found resistance around the .8466 week open price and support near .8420. Could the Kiwi have a chance to bust out of its range today?

Alas! The economic schedule of New Zealand is still empty today! This means that the Kiwi could be tossed this way and that by risk sentiment, as well as economic reports from its comdoll buddies. Don't forget that the RBA is set to release its monetary policy meeting minutes while the BOC is scheduled to make its interest rate decision today, which means that you should drop by my Australian economic commentary and my forex fundamentals on Canada.

[PipDiddy]

Can anybody say “fresh record highs?” Yesterday the Kiwi was almost as fresh as I am in my new leather pants when it tipped a new record high against the Greenback on a wave of risk appetite in markets. NZD/USD climbed all the way to .8573 before capping the day with a 120-pip gain at .8556. Not bad eh?

The Kiwi strength is amazing given that New Zealand didn’t even release any economic report. As it turned out, the rally in risk appetite is enough to push the comdoll to new heights.

Will the Kiwi bulls do as well today when New Zealand releases an economic report? Data on visitor arrivals will be published today at 10:45 pm GMT, and a figure better than May’s 0.3% decline might convince more traders to flock the high-yielding Kiwi.

[PipDiddy]

Another new record for the Kiwi! NZD/USD reached a new record high at .8589 yesterday as the pair got a boost from risk appetite. How much higher can the Kiwi go?

News that both the U.S. and the euro zone are moving closer to finding a solution to their debt problems kept risk aversion at bay yesterday. Because of that, NZD/USD broke out of consolidation to establish a new record high near the .8600 major psychological level. In fact, the Kiwi seemed to ignore the reported 5.1% drop in visitor arrivals for June, TEN times worse than the 0.5% decline seen last May.

Today, only the credit card spending report is due from New Zealand. Last May, credit card spending was up by 5.1% from a year ago. Another increase could provide support for the Kiwi, but all that depends on whether risk appetite stays in the markets or not. Stay on your toes for any changes in market sentiment!