Daily Economic Commentary: New Zealand

[PipDiddy]

We should call the Kiwi the "Fresh Prince" by the way it posted fresh all-time highs yesterday! With risk appetite fueling its rise, NZD/USD managed to crawl into never-before-seen territory, climbing up to .8623 to post a 60-pip gain.

Even though credit card spending growth ticked down from 5.5% to 4.5% last month, the Kiwi went on its merry way and continued hiking up the charts. Now that the Kiwi is forging new all-time highs, New Zealand officials have begun expressing their concerns about its strength. Will they play the jawboning and intervention game, too? Another question we should be asking is, "How soon can we expect to see a rate hike from the RBNZ now that the economy is showing signs of stabilizing?"

Fortunately, we'll have time to think about that since New Zealand won't be rolling any reports out today. In the meantime, look for developments in the U.S. to direct price action on NZD/USD. Good luck, kids!

[PipDiddy]

Did you catch that Kiwi move last Friday? NZD/USD reached another new record high! The pair rallied past the .8600 level that day and topped at .8675 before closing at .8643. Will we see more highs from the Kiwi this week?

New Zealand didn't release any economic data last Friday but improved risk appetite continued to push the pair upwards. Today, New Zealand is set to release its trade balance for June at 10:45 pm GMT. Watch out for this particular report because their surplus is projected to fall from 605 million NZD to 404 million NZD during the month. If that happens or if the actual figure comes in weaker than consensus, the Kiwi might be forced to retreat from its recent highs.

No reports are due from New Zealand on Tuesday as it gears up for a busy day on Wednesday. During the Asian session, the NBNZ business confidence report will be released while the RBNZ will make their rate decision during the U.S. session around 9:00 pm GMT. The central bank is expected to keep rates on hold at 2.50% but watch out for any comments regarding future monetary policy moves. Lastly, on Thursday, New Zealand will report its building consents for June.

[PipDiddy]

"I can get used to this!" said the Kiwi as it hung above the .8600 handle against the Greenback. Despite weak trade balance data, the Kiwi was able to trade comfortably in the area of its new all-time highs. Can it keep this up?

You wouldn't be able to tell from the way the Kiwi has been trading that New Zealand's trade surplus dropped from 552 million NZD to 230 million NZD last month, falling short of expectations for a 391 million NZD surplus.

Not the best data for June, but there is a silver lining to all of this. Overall, exports rose 4.5% last quarter, with dairy and meat products leading the way.

As an export-dependent country, New Zealand will be keeping a close eye on its bread-winning industry, especially now that the Kiwi is trading at new all-time highs. That being said, expect the RBNZ to take into consideration yesterday's results when it makes its rate decision tomorrow. In the meantime, keep risk sentiment in check, fellas!

[PipDiddy]

Ain’t no thang but a Kiwi wing! For the 6th consecutive day, NZD/USD closed higher, as the pair closed another 50 pips higher at .8716. Is there no stopping the mighty Kiwi?

Later today, the Reserve Bank of New Zealand will be releasing its interest rate decision. No rate change is expected, but it’d be best to stay on your toes and listen to the accompanying statement. It’ll be interesting to see what RBNZ Governor Alan Bollard has to say about the state of the economy and the strong rise of the Kiwi. Tune in at 9:00 pm GMT to find out what will be said!

[PipDiddy]

A good start, but a poor finish was what we got from the Kiwi yesterday! A strong reading from the NBNZ business confidence lifted it up in the Tokyo session, but NZD/USD eventually gave up all of its gains late in the New York session. What can we expect today?

After the NBNZ business confidence report upgraded its reading from 46.5 to 47.6, the Kiwi started marching up the charts. As a matter of fact, it tapped a new all-time high at .8767 before it turned down and erased all its intraday gains. Apparently, the perkiness of New Zealand business sentiment wasn't enough to sustain the Kiwi's rally, even though spirits were up in all sectors of the economy.

It should come as no surprise then that the RBNZ sounded really hawkish in its rate statement a few hours ago. RBNZ Governor Bollard and his men believe that the economy is picking up steam, and that it may actually be strong enough to warrant a rate hike soon. New Zealand has certainly come a long way from its rate-cutting days back in March!

So far, this has been great news for Kiwi bulls, who have eagerly been buying Kiwis since the rate statement was made. However, the bullish move isn't as strong as you'd expect, probably because Bollard expressed concern about the Kiwi's strength and its effect on the economy.

The only report due today is the monthly building permits release, which posted a 2.2% increase in May. Should this print a strong rise, it would be the second straight month that growth in building approvals accelerated. Who knows, maybe that's what buyers are waiting to see before they take the Kiwi to new all-time highs!

[PipDiddy]

Oooohhhhh baby, it’s starting to look like the Kiwi has run out of steam! For the second day in a row, NZD/USD failed to sail higher, as it closed right at its opening price of .8692. Is this the top for the Kiwi?

If you ask me, I ain’t quite ready to call a top on the Kiwi. The pair may fall in the coming days as traders book some profits, but there’s a good chance that they will also see any dips as buying opportunities. Of course, everything might change over the next couple of days, but for now, the Kiwi is STRONG!

Late yesterday, building consents data showed that approvals fell by 1.4% in June, after they rose by 2.4% in May. This didn’t have too much of an effect on Kiwi trading, but this is something I’ll be monitoring in the coming months.

No biggies on the docket, but it’d be best if you kept an eye out for shifts in risk sentiment. As my momma always used to say, things can change on a dime, so be careful out there!

[PipDiddy]

“Eat my dust, dollar!” The Kiwi smoked the dollar’s butt on Friday when NZD/USD bounced off support at .8650 and rallied to close just a few pips below its all-time highs at .8789 with a 95-pip win.

No economic reports were released from New Zealand but the pessimism over the U.S. debt ceiling seemed enough for investors to buy Kiwis in exchange for ‘em Greenbacks.

Our forex calendar is still blank data for the Kiwi today so keep tabs on market sentiment, ayt?

[PipDiddy]

Just like its comdoll siblings, the New Zealand dollar started the week off on a weaker note, as risk aversion took over the markets. NZD/USD suffered a 29 pip loss to close at .8766. Could this finally be the week where the Kiwi gives back its ridiculous gains?

No biggies on the docket today, but that don’t mean we won’t see any wild moves on the Kiwi. Watch out for shifts in risk sentiment, as it seems like that could be dominant market theme for this week.

[PipDiddy]

Whoa! Is it open season for the Kiwi?? It looks like bears hunted down the currency in yesterday’s trading as NZD/USD plunged from its intraday high of .8785 all the way down to its closing price of .8670.

Although New Zealand’s labor cost index for the second quarter came in as expected at 0.5%, continued concerns about the U.S. economy and Europe’s sovereign crisis took a toll on higher-yielding currencies.

But perhaps the employment report, due later at 10:45 pm GMT, will be able spark enough good vibes for the Kiwi. Watch out so a figure better than the expected 0.1% uptick in employment change. Meanwhile, also keep in mind that the unemployment rate is seen to come in at 6.5%.

[PipDiddy]

While other major currencies basked in the glory of volatility, the Kiwi simply traded in a relatively tight range yesterday due to the absence of an economic catalyst. NZD/USD just bounced around its intraday session highs and lows and ended the day with a small 46-pip loss.

Earlier today, however, the Kiwi experienced a huge drop due to a disappointing first quarter labor report. The report showed that there was no increase in the number of people employed and the unemployment rate did not improve and stayed at the 6.5% level.

New Zealand’s forex calendar has nothing more in store for us today, so the bearish sentiment towards the Kiwi due to the jobs report could remain all day. In any case, still watch out for shifts in market sentiment! You never know when the market will turn bullish!