Daily Economic Commentary: New Zealand

[PipDiddy]

Wham, bam, thank you risk appetite! Thanks to the debt deal reached by the European leaders, NZD/USD rocketed by 262 pips and capped the day at .8206. Boo yeah!

New Zealand didn’t release any economic reports yesterday, but the optimism in the euro region was enough to keep the good vibes coming from the comdolls like the Kiwi.

If you’ve read my EUR report, you’ll know that the EU officials have finally come up with concrete ideas to save the region’s debt. Add to that positive economic reports from the other regions and you got a mean recipe for risk appetite!

The economic boards will be empty in New Zealand again today, but make sure you stick around for any reports that might affect risk appetite!

[PipDiddy]

The Kiwi traded in a perfect "U" pattern last Friday as it fell early in the day but recovered all of its losses before it closed for the week. NZD/USD, for instance, ended the U.S. trading session at .8228, just 20 pips higher from its opening price during the Asian session.

No report was released last Friday but we've got a couple of red flags on New Zealand's forex calendar this week.

Later, at 9:45 pm GMT, the country's Labor Cost Index will be released. It is slated to show a 0.9% increase, up from the previous month's 0.5% rise.

On Thursday, data on the country's labor market will come out. The market is expecting the unemployment rate to fall to 6.4% for the third quarter of this year. The market also predicts that hiring improved by 0.6% from the previous quarter's flat reading.

[PipDiddy]

Just like its comdoll siblings, the New Zealand dollar traded to the beat of risk aversion yesterday and fell flat on its face. After opening at .8199, NZD/USD found itself trading at .8067 by the end of the New York session, marking a 132-pip loss for the day.

The Kiwi took a hit thanks to poor building consents figures, which indicated that month-on-month approvals fell by over 17% in October. Remember, without government permission, construction of new buildings cannot begin, and this doesn’t bode well for the construction industry. This weakened the New Zealand dollar, causing it to take some bumps and bruises yesterday.

For today, watch out for the RBA interest rate decision, as there is some speculation that it may cut interest rates. This would cause a spike in volatility in the Australian dollar, which would indirectly affect the New Zealand dollar as well.

[PipDiddy]

Just like that, the Kiwi erased its gains from last week faster than you can say "Kim Kardashian filed for divorce!" NZD/USD sank back below the .8000 handle and closed at .7951 as risk aversion gripped the markets yesterday.

New Zealand didn't release any economic reports yesterday, but risk aversion was just too much for the Kiwi to bear. The RBA's decision to cut rates by 25 basis points was a blow to the Aussie, which also dragged the Kiwi down. Next, the weaker than expected Chinese manufacturing PMI hurt the commodity-dependent economies, also contributing to the Kiwi's drop. Last but not least, concerns about the Greek referendum discouraged traders from taking on more risk yesterday and took its toll on the higher-yielding comdolls.

Still, the Kiwi could have a chance to bounce back today if its employment reports come in better than expected. The employment change data is due 10:45 pm GMT today and could show that hiring was up by 0.6% during the third quarter of the year after staying flat in the previous period. This could be enough to bring their jobless rate down a notch from 6.5% to 6.4%, which could be positive for the New Zealand economy and currency.

[PipDiddy]

Three in a row, baby! Kiwi bears extended their winning streak as NZD/USD struggled to stay above its opening price. After a bit of sideways trading, the pair eventually gave in to weak risk appetite and tumbled late in the New York session to post a 38-pip decline for the day. Will Kiwi bears pull off a fourth straight win today?

It seems like we haven't seen the end of the Kiwi sell-off yet. Just hours ago, New Zealand published its quarterly employment data, and the markets weren't please with what they saw. The number of employed people rose by 0.2% in Q3 2011, which is less than half the increase that most were expecting to see.

This weak rise in employment took the unemployment rate up from 6.5% to 6.6% rather than down to 6.4% as expected. But as alarming as this sounds, it isn't actually that bad. The rise in unemployment was mostly caused by a large jump in the number of people in the work force.

Nothing more to see from New Zealand today. In the meantime, set your eyes on the euro zone and the U.S. as they've got major events on tap that could affect overall risk sentiment.

[PipDiddy]

And just when we all thought all hope was already lost for the Kiwi, the bulls put their A-game on and boosted NZD/USD from its intraday low of .7807. At the end of the day, the pair settled 42 above its opening price at .7956.

Mind you, the Kiwi was able to end the day despite negative jobs data. It was reported yesterday that the change in the number of employed people in New Zealand only grew by 0.2% and disappointed the market's 0.5% forecast. On top of that, the unemployment rate was higher at 6.6% in Q3 2011 than it was in the previous quarter at 6.5%. Analysts must have been disappointed after predicting it to come in lower at 6.4%.

Our forex calendar doesn't have any report scheduled for the Kiwi today, but we do have the NFP report from the U.S. on tap. Keep tabs on it as it could cause a change in market sentiment. Yesterday, news about Greece canceling its plans for a referendum boosted risk appetite. A better-than-expected jobs report from the U.S. may just fuel risk appetite even further. So watch out!

[PipDiddy]

Despite the release of the U.S. non-farm payrolls, NZD/USD's movement last Friday was nothing special. The pair simply moved sideways, traded within resistance at .7967 and support at .7900, and then closed the day barely changed from its opening price.

No important economic data was released in New Zealand last Friday and the country's economic schedule this week seems to be very boring! The only major report due is the RBNZ Financial Stability report. It is a media conference that talks about the bank's view on inflation, growth, and other economic conditions that affect the country. It will be held on Wednesday, at 8:00 pm GMT.

[PipDiddy]

Just like its comdoll siblings, the Kiwi remained within range to start the week. After hitting a high at .7999, NZD/USD retreated to close at .7972, marking just a 17-pip gain on the day.

Once again, we’ve got no data coming out from New Zealand, but that doesn’t mean you can take a chill pill and hit the waves with Pip Surfer (unless of course, you plan to hit the trading waves, which would be perfectly fine!). Make sure to tune in and listen for any developments coming out from Europe, as you never know what may hit the markets. If you aren’t ready, you might just get wiped out!

[PipDiddy]

Slow and easy is the way of the Kiwi. Without any economic data on tap from New Zealand, the comdoll still traded higher against the Greenback. NZD/USD met resistance around the day open price at .7972 a couple of times before finally rallying to close the day at .7986.

Risk appetite must have boosted the comdoll to another win as news of Berlusconi's impending resignation hit the airwaves.

Without any economic reports from New Zealand today, the Kiwi will most probably take its cue from market sentiment. So be sure to keep an ear out for reports from Europe, ayt?

[PipDiddy]

Talk about a wipeout! The kiwi got murdered yesterday, as a wave of risk aversion swamped the markets. NZD/USD dropped a massive 169 pips, falling all the way down to .7818. Could we see more of the same today?

With Italian yields soaring past the critical 7.0% mark, commodity dollars like the Kiwi took the biggest hits in yesterdays trading. With no hardcore data coming out from New Zealand today, the Kiwi may be prone to more losses as risk aversion continues to unsettle the markets.