Daily Economic Commentary: New Zealand

[PipDiddy]

Strike four for NZD/USD! The Kiwi’s luck failed to turn around yesterday as traders continued to price in risk aversion and weak New Zealand economic reports. The pair only reached an intraday high of .8058 before it closed 35 pips lower than its open price. Uh-oh.

It’s not helping the comdoll bulls that New Zealand just published its weaker-than-expected building consents data a couple of hours ago. According to the report, building consents only grew by 2.0% in July, which is a heck of a lot slower than the 5.9% increase that we saw in June.

Only the NBNZ business confidence is slated to print from New Zealand today, so make sure you have your trading plans ready! Will the Kiwi finish the week with consecutive losses, or will the comdoll bulls step up?

[PipDiddy]

One, two, three, four, five… Five is the number of days the commodity-based Kiwi has lost versus the safe haven Greenback! NZD/USD, which began the day .8010, ended the U.S. trading session 29 pips lower at .7981. Risk aversion seems to be the name of the game ahead of the Jackson Hole summit as high-yielding currencies, commodities, and equities sell-off.

Data released from New Zealand yesterday did very little to support the Kiwi. The New Zealand retail sales report failed to meet forecast as it showed a 0.8% decline. The consensus was only a 0.1% decrease.

New Zealand’s economic cupboard is completely empty today though I think we could still see a lot of action from the Kiwi. Starting at 12:30 pm GMT, a couple of important news releases from both the U.S. and Canada will be released that could have considerable effect on the Kiwi. Watch out for them!

[PipDiddy]

Phew! After dragging NZD/USD down for five straight days, the Kiwi bears finally paused for a breather as the bulls pushed the pair 52 pips higher than its open price. So what made the Kiwi bulls giddy?

No economic data was released from New Zealand last Friday, so Ben Bernanke’s Jackson Hole speech might have caused the activity in NZD/USD. Though Big Ben didn’t pull the trigger on the QE3 stimulus program, he hinted that it’s still remains a realistic option if Uncle Sam’s condition doesn’t show improvements soon.

The overseas trade index is one of the two economic reports scheduled from New Zealand this week. The data printed a 2.6% decline in the second quarter, which is a bit lower than the 2.0% slip that the analysts were pricing in.

Since the ANZ commodity price index data tomorrow at 1:00 am GMT is the only report to watch for the rest of the week, you might want to keep tabs on the other reports coming up from the major economies.

Good luck trading this week!

[PipDiddy]

Kiwi gapped down over the weekend and continued to slide down the charts on Monday, causing NZD/USD to close at .7974, 34 pips down from its .8008 open price. Will it have a chance to bounce back today?

Perhaps the Kiwi was still reeling from weaker than expected Chinese manufacturing PMI, which is also negative for the Australian dollar, released over the weekend. New Zealand didn't release any economic figures yesterday so the Kiwi was probably affected by weaker than expected retail sales data from Australia as well.

There are no economic reports on New Zealand's schedule today, which means that the Kiwi could take its cue from Australian data again. Bear in mind that the RBA is set to make its monetary policy decision at 4:30 am GMT today and, if the central bankers sound dovish about their economic prospects, the Kiwi could take a hit along with the Aussie.

[PipDiddy]

What a coup by the Kiwi bears! Despite the release of a strong New Zealand data, NZD/USD fell for the second day in a row. It registered a 36-pip drop to .7938 after hitting an intraday high at .7998. What gives?

Though the ANZ commodity prices beat its previous -0.4% reading with a 0.5% growth, the Kiwi bulls and bears were too busy paying attention to risk sentiment to notice. Apparently, investors are starting to believe that the ECB will most likely disappoint expectations on Thursday when the central bank announces its plans to help bring down the yields of the peripheral euro zone economies.

No data is scheduled for release in New Zealand today, so stay glued to the tube for any comments that might affect comdoll trading!

[PipDiddy]

After a couple of days of losing to the mighty Greenback, the Kiwi was able to squeeze in some gains during yesterday's trading as NZD/USD closed at .7945, 6 pips up from its .7939 open price. Was this merely a retracement or are we going to see a strong rebound soon?

New Zealand didn't release any economic reports yesterday but the Kiwi was able to benefit from the improvement in risk sentiment. It seems that market participants are pricing in expectations of further stimulus from several central banks and they expect these to provide a strong boost to global economic growth.

There are no economic reports due from New Zealand today, which means that the Kiwi could be swayed by risk sentiment yet again. Bear in mind that there are a few central bank decisions during the London session and that the U.S. is set to release its ISM non-manufacturing PMI later on. These events could have a huge impact on risk so make sure you keep close tabs on 'em!

[PipDiddy]

Finally, some signs of life from the Kiwi! The Kiwi had its strongest performance in over a month yesterday, as it posted a 74-pip gain against the Greenback. From its opening price, NZD/USD crawled slowly up the charts at the start of the day, but it picked up its pace and sprinted higher in the New York session.

Though the newswires were dead silent yesterday, risk appetite was strong enough to stoke demand for higher-yielding currencies. The Kiwi joined its fellow comdolls (the Aussie and Loonie) in staging a strong, solid rally against the Greenback.

Will we get more of the same today? Perhaps! But that'll probably depend on the upcoming U.S. NFP report since New Zealand won't be publishing any numbers today. With that in mind, I suggest you check out my USD commentary so you know what to expect from the U.S. today.

[PipDiddy]

Fly, Kiwi, fly! Thanks to the post-NFP U.S. dollar selloff we saw last Friday, NZD/USD managed to enjoy a strong rally and end the day in the green at .8123. What's in store for the Kiwi this week?

New Zealand didn't release any economic reports last Friday but the Kiwi still managed to pocket some gains as it took advantage of the U.S. dollar's weakness. As it turns out, net hiring in August came in below 100K for Uncle Sam and this triggered a fresh wave of QE3 speculations.

This week, the only red flag on New Zealand's schedule is the RBNZ rate decision scheduled on Wednesday 9:00 pm GMT.

There are no reports set for release from New Zealand today but let me warn you that China just released a bunch of economic figures over the weekend and these could have an impact on the Kiwi's movement for the upcoming trading sessions. Chinese annual CPI came in line with expectations at 2.0% while PPI missed the mark and posted a 3.5% decline instead of the estimated 3.2% drop. Fixed asset investment and industrial production came in slightly below expectations while retail sales came in as expected and showed a 13.2% annual increase.

[PipDiddy]

If only the Kiwi had started this week as strongly as it had ended last week! NZD/USD began with a 16-pip gap down over the weekend as it opened at .8107. From there, things only got worse as sellers took the pair another 20 pips down to .8087.

It seems the improvement in the REINZ HPI, which rose from -0.7% to 1.3% in August, wasn't enough to sustain the Kiwi's rally. Looking at the details of the report, you'll notice that Auckland is leading the pack in terms of demand, while the rest of the country lags behind. Still, it's nice to see that New Zealand's housing market is showing some signs of life.

Nothing on the economic calendar for New Zealand today. In the meantime, keep tabs on risk appetite as it may dictate price action on the higher-yielding currencies such as the comdolls ahead of the FOMC statement. Good luck!

[PipDiddy]

Talk about taking advantage of the opportunity! With the greenback floundering, the Kiwi bulls took over and pushed NZD/USD to new highs. The pair rose nearly 100 pips to finish at .8185, and is now knocking on the door of the .8200 handle. Will resistance hold?

The make-or-break catalyst for the Kiwi today may be the RBNZ interest rate statement, which will hit the markets at 9:00 pm GMT.

Nobody’s expecting any action from the RBNZ, but it’ll be interesting to see what our homies over at the central bank think about the economy. Look out for comments about the situations in the euro zone and in China and try to see whether it takes a bearish or bullish tone to help guide your trading.