Daily Economic Commentary: New Zealand

[PipDiddy]

Fly, Kiwi! Fly! That's exactly what the commodity currency did in yesterday's trading. NZD/USD flew past resistance at psychological handles to close the day 144 pips above its opening price at .7708.

We didn't have any data on tap from New Zealand yesterday. However, the comeback in risk appetite somehow helped the comdoll trade higher.

With that said and given that our economic calendar is once again blank for reports for the Kiwi today, be sure you keep tabs on market sentiment. Keep in mind that the currency usually rallies when risk appetite is in play. Good luck!

[PipDiddy]

Just when it looked like the Kiwi was gonna soar to new highs, it came crashing down late in the New York session yesterday. NZD/USD hit a high at .7754 but soon came tumbling down, giving up all its gains to finish at .7682, marking a 19 pips loss for the day.

Oddly enough, the Kiwi couldn’t sustain any momentum sparked by the rate cut by the People’s Bank of China. Did the bulls simply run out of steam?

With not much big data heading our way today, we might see more subdued trading for the Kiwi. Still, let me warn you to stay on your toes as you never know what might rock the market!

[PipDiddy]

After dropping almost 60 pips from its opening price during the Tokyo session, the Kiwi put its A-game on and started to rally. By the end of the day's trading, NZD/USD had settled at .7710, 28 pips above its opening price. Way to go, Kiwi!

There weren't any economic data from New Zealand on Friday which means that the currency's performance was mostly determined by market sentiment.

With our forex calendar still blank for reports from the Kiwi today, be sure you keep tabs on market sentiment. NZD/USD gapped up over the weekend following Chinese data and news about the EU bailing out Spanish banks that hit headlines over the weekend. If risk appetite is sustained, we may just see the pair continue trading higher, so be on your toes!

[PipDiddy]

What happens when a flightless bird jumps off a cliff? It drops like a rock! The Kiwi's price action was no different yesterday as it fell sharply after gapping up against the Greenback over the weekend. NZD/USD ended the day 69 pips below its opening price at .7690.

The REINZ HPI report did little to provide support for the Kiwi, even though it printed a much better reading in May. House prices were up 1.7% last month, a nice improvement to the 0.3% decline we saw in April.

Meanwhile, manufacturing sales decline 1.8% last quarter, which isn't exactly what you'd like to see after Q4 2011's 0.9% surge.

Up ahead, we have more New Zealand data on tap as the Westpac consumer sentiment report is due to come out sometime today. Will the index rise from its previous reading of 102.4, or are we up for more disappointment? You'll just have to wait and see!

[PipDiddy]

Make way for the Kiwi yo! NZD/USD hustled up the charts in yesterday's trading, closing with a wicked awesome 78-pip gain at .7768. Boo yeah!

There wasn't any economic report from New Zealand. However, good vibes were aplenty in the markets yesterday as investors remained optimistic about Spain getting cash for recapitalization.

If you're planning to trade the Kiwi today, make sure you're extra careful. According to our forex calendar, the RBNZ is due to announce its interest rate decision at 9:00 pm GMT later today. Although no one expects an interest rate cut or hike from the central bank, it will still be worth your while to listen in to the statement. Who knows, RBNZ Governor Alan Bollard may just drop hints about the bank's future monetary policy.

[PipDiddy]

Similar to other major currency pairs, NZD/USD mostly traded horizontally most of the day before dipping late in the U.S. trading session. NZD/USD closed the day at .7748, 20 pips lower from its opening price.

According to news reports, the late run to safety was the effect of a not-so-well-known credit rating agency called Egan-Jones downgrading Spain’s debt to CCC+. The agency also placed Spain’s sovereign debt outlook to negative.

In other news, the Reserve Bank of New Zealand (RBNZ) announced that it had decided to keep rates unchanged at 2.50%. The central bank said that the political and economic stresses in Europe, along with weaker-than-expected data, were the reason behind the decision.

No major economic event scheduled for the rest of the day, so pay attention instead to data coming out of other major economies. The release of the U.S. consumer price index, for instance, is something you need to watch.

[PipDiddy]

Right through the .7800 handle! The Kiwi broke above the major psychological resistance yesterday as the Kiwi traders joined the bulls’ bandwagon. NZD/USD flew by 66 pips and blasted above the .7800 handle to end the day at .7814. Booyah!

It might have also helped the Kiwi that New Zealand’s business manufacturing index clocked in a 55.7 reading in May, which is a lot better than the 48.2 figure we saw in April. But, as I mentioned in the other parts of my piece, the attention was mainly focused on central bankers that hinted of a coordinated intervention in case liquidity runs dry after the Greek elections. And you know how the markets just love it when they say “coordinated!”

There won’t be any report coming out from New Zealand today, but make sure you keep your eyes glued to the tube for any news that might affect the demand for the comdolls!

[PipDiddy]

That makes it two in a row! For the second straight day last Friday, the Kiwi was able to post significant gains versus the safe haven Greenback. NZD/USD closed the U.S. trading session at .7894, 81 pips higher from its opening price that day.

According to news reports, it was speculation that the Fed would engage in more easing in its next meeting that pushed the Greenback lower. The bad data from the U.S. also added to the overall weakness of the Greenback.

This week, there are two major reports on New Zealand’s economic calendar.

The first one is the current account balance. It is scheduled to publish on Tuesday, at 10:45 pm GMT. It is expected to show a 1.16 billion NZD deficit, down from the previous month’s 2.76 billion NZD deficit. The second one is New Zealand’s first quarter GDP. The GDP will be released on Wednesday and it is anticipated to show that the country grew 0.4% during the first quarter of this year.

Both reports typically have a positive correlation with price action. Higher-than-expected results tend to result in a rally in the Kiwi.

[PipDiddy]

Strike three for the Kiwi bulls! NZD/USD got on the risk appetite train and posted its third consecutive gain yesterday. The pair only dipped to a low of .7888 before it finished the day at .7922. What fueled the Kiwi bulls’ fire?

Not New Zealand’s economic reports, that’s for sure. No economic data was released from the country yesterday, so traders mainly traded on risk sentiment. As it turned out, the comdoll bulls were as giddy as my home girl Happy Pip when the New Democracy party took the throne in the recent Greek elections. As many of you know, the win for the pro-bailout party hinted that Greece might stay in the euro block after all.

Will New Zealand’s current account report at 10:45 pm GMT fuel the Kiwi bulls’ fire? The report is only expected to clock in a deficit of 1.14 billion NZD in the first quarter after showing 2.76 billion NZD deficit in the last quarter of 2011, but keep your heads in the game in case we see any surprises!

[PipDiddy]

NZD/USD kept zooming up the charts yesterday as traders started to position themselves ahead of potential QE3 from the Fed. The pair started the day at .7923, jumped to a high of .7991, then closed at .7980. Will the Kiwi be able to hold on to its gains today?

Despite the weaker than expected current account balance from New Zealand, the Kiwi was able to take advantage of U.S. dollar weakness yesterday as NZD/USD marked its fourth consecutive day of rallies. Although the current account deficit came in at 1.31 billion NZD, larger than the consensus at 1.13 billion NZD, it was still a smaller shortfall compared to the 2.83 billion NZD deficit seen during the previous period.

Today, New Zealand is set to release its first quarter GDP figure and possibly show a 0.5% reading. This would be a slight improvement over the 0.3% economic expansion seen during the last quarter of 2011 but, if the actual figure misses expectations, we might see the Kiwi return its recent gains. Keep an eye out for the actual release at 10:45 pm GMT.