Daily Economic Commentary: New Zealand

[PipDiddy]

In the Kiwi's case, no news is good news! New Zealand didn't publish any reports yesterday, allowing the Kiwi to ride the tides of sentiment higher up the charts. NZD/USD climbed 15 pips from its opening price to end the day at .7993.

Still riding bets on QE3, the Kiwi was able to extend its rally against the Greenback. Of course, it might've also received a boost from commodities, which also joined yesterday's risk rally. Ahh, the perks of being a comdoll!

Again, nothing on the economic calendar for New Zealand today. In the meantime, y'all should monitor risk sentiment, as it seems to be driving the markets as of late. Remember, risk appetite is good for the Kiwi!

[PipDiddy]

No data? That's no problem for the Kiwi! As the comdoll showcased in yesterday's trading, it was able to rally against the dollar despite the lack of economic reports from New Zealand. NZD/USD closed the day 38 pips above its opening price at .8031.

Analysts point to the rise in commodity prices as well as in equities for the Kiwi's win yesterday. With that said and given that out forex calendar is once again blank for reports for the comdoll today, be sure you keep tabs on other markets. Who knows, they could continue to move the Kiwi.

[PipDiddy]

I don't think I need to elaborate on what happened to the Kiwi after last Friday's big risk-off sell-off. Y'all should know by now that it took a massive hit! From its opening price of .8029, NZD/USD retreated to .7967 without ever looking back. Will sellers continue taking this pair lower?

Well, it looks as though the answer to that question will depend on the market's risk appetite today, as New Zealand won't be publishing any reports today.

However, we do have a couple of notable events on this week's economic calendar. First, we have New Zealand trade balance data coming out tomorrow. The country's trade surplus is expected to shrink from 301 million NZD to just 20 million NZD.

And then on Wednesday, we have the much-anticipated RBNZ rate decision. No one's really expecting the central bank to change its interest rates, but the markets are particularly interested on whether lower commodity prices and a deteriorating global economy have dampened the economic outlook for New Zealand.

[PipDiddy]

Just like the bird it’s named after, the Kiwi was flightless in yestreday’s trading matches. Risk aversion grounded the commodity currency, as NZD/USD dropped a solid 83 pips to end at .7892.

Late today, trade balance figures will be available at 9:45 pm GMT. Word out of the Tasman Sea is that New Zealand posted a trade surplus of 20 million NZD last month, which would be a sizeable drop from the 301 million NZD we saw in May.

If this is true, or if the actual figures comes in to show a deficit, could it give the RBNZ reason to implement looser monetary policy in order to weaken the Kiwi and stimulate the economy? Perhaps!

[PipDiddy]

The Kiwi received a boost from positive Chinese data early in the day, but because of risk aversion, it eventually erased all of its gains! NZD/USD crawled lower for the third straight day, ending 26 pips below its opening price at .7866.

No news from New Zealand yesterday, so it came as no surprise that Kiwi price action just went with the flow of risk sentiment. Unfortunately, sentiment favored sellers (again!) yesterday, which is why we saw the Kiwi decline.

Today, we've got something juicy on the economic calender - the RBNZ rate statement! The central bank is expected to retain rates at 2.50%, so we probably won't get any surprises in that department. What we should be taking note of is whether falling commodity prices and the deteriorating global economy has affected the RBNZ's outlook for New Zealand. We'll just have to find out at 9:00 pm GMT.

[PipDiddy]

Just like its comdoll siblings, the Kiwi benefited from a nice risk rally yesterday. After zooming lower during the Tokyo session, NZD/USD rebounded later in the day and actually finished 21 pips higher at .7887.

Earlier, the Reserve Bank of New Zealand released its interest rate decision and as expected, kept rates steady at 2.50%. According to RBNZ head honcho Alan Bollard, the current level of interest rates was appropriate, although he did acknowledge concerns about the euro zone and the deteriorating outlook of New Zealand’s trade partners. He also mentioned that the strength of the Kiwi could be limiting demand right now.

Clearly, the RBNZ wants to take a cautious approach with regards to its interest rate policy and will most likely wait for more data before proceeding with a rate change.

We have no other big reports headed our way today, so expect risk sentiment to dictate Kiwi trading.

[PipDiddy]

Fly, Kiwi, fly! NZD/USD soared by close to 150 pips yesterday as it ended the day 25 pips above the .8000 handle, even though New Zealand's economic schedule was empty. What caused this sudden rally and will it carry on today?

Apparently, ECB head Mario Draghi stepped up to the plate yesterday and reassured markets that the central bank will do everything it can to protect the euro. This calmed market participants' fears about a possible euro zone breakup that was projected to happen in case the region isn't able to stay on top of its debt situation. With the ECB President committing to save the euro, risk appetite returned to the markets and lifted the higher-yielding New Zealand dollar against its counterparts.

There are no reports due from New Zealand today, leaving the Kiwi at the mercy of risk sentiment. Don't forget that the U.S. is set to release its advanced GDP report for Q2 2012 at 12:30 pm GMT, and that weaker than expected data might put a halt to an ongoing risk rally.

[PipDiddy]

Score another one for the Kiwi! Like its other comdoll buddies, the Kiwi enjoyed a nice rally last Friday despite the lack of data in New Zealand. NZD/USD climbed by another 67 pips to .8092 after falling to an intraday low of .7991. So what made the Kiwi bulls giddy?

It’s not New Zealand’s economic data, that’s for sure. Heck, it didn’t release any economic report last Friday! But the comdoll bulls were giddy nonetheless, thanks to European officials hinting at a coordinated action to support the euro. Of course, it might have also helped the high-yielding currencies that the GDP report from the world’s largest economy came in slightly stronger than expected.

After the strong building consents data that we saw a couple of hours ago, New Zealand won’t be releasing any more economic reports today. NZD/USD is currently dealing with a bit of a pullback despite the strong data, but watch this pair closely as we might see more bullish action once the pullback has played out.

[PipDiddy]

Without any market-moving data on tap yesterday, price action on NZD/USD was as exhilarating as the archery event in the Olympics. Ha! The pair traded in a 40-pip range before closing the day 17 pips below its opening price at .8086.

Only the building consents report for June was released. It showed the the number of building permits issued for June grew by 5.7% after contracting by 7.2% in May.

Oh, but what's this! Just a few minutes ago, the NBNZ Business Confidence report printed at 15.1 for July. This should be good news for the Kiwi since the figure is higher than May's 12.6 reading, implying that business confidence in the country is improving.

Despite that, don't get too excited buying the currency. Who knows, something may happen today that could spark risk aversion and send the Kiwi trading lower. So be careful, ayt?

[PipDiddy]

Booooooooooooring! Due to the absence of market-moving economic events, NZD/USD was completely directionless yesterday. NZD/USD simply paced back and forth within a tight 40-pip range with resistance at .8120 and support at the .8080 level.

The only significant report released from New Zealand was the NBNZ Business Confidence Survey. It came in with a reading of 15.1, which was slightly higher than the previous month’s 12.6.

Today, there’s absolutely nothing on New Zealand’s economic cupboard. This means that we could possibly see the Kiwi move in a sideways manner just like yesterday during the Asia and European sessions, but be very susceptible to today's US events.