Daily Economic Commentary: New Zealand

[PipDiddy]

The Kiwi flew to an intraday high of .8207 against the dollar only to crash in the New York session. By the end of the day's trading, NZD/USD had settled 1 pip below its opening price at .8166.

It looks like news about a credit downgrade for Spain weighed on the comdoll. With our forex calendar blank for reports from Middle Earth... err, I mean New Zealand, we'll probably see the Kiwi become vulnerable to market sentiment in today's trading.

So be sure you keep tabs on developments from the euro zone, ayt?

[PipDiddy]

And the consolidation continues for the Kiwi! With no hard data to bust it out of consolidation mode, NZD/USD stuck within its average trading range and finished at .8174, just 8 pips above its opening price.

Looking at our economic calendar, we have nothing scheduled for release from New Zealand, so it might be best to take your trading cues from risk sentiment. If it appears that equities and commodities are rallying, there’s a good chance that the Kiwi will follow suit!

[PipDiddy]

The .8200 major psychological level just proved too much for the Kiwi to handle. NZD/USD rallied to an intraday high of .8210 on Friday only to drop and close 4 pips below its opening price at .8170.

Just like its comdoll counterparts, the absence of economic reports from its motherland left the Kiwi vulnerable to market sentiment. It was able to rally during the Tokyo and London sessions on rumors about a Spanish bailout and PBOC rate cut. However, it seems like traders quickly abandoned the currency when they realized that there was no truth to the hearsay.

But don't worry! Later today at 9:45 pm GMT, New Zealand's quarterly CPI report will be on tap and it could provide the Kiwi with a clearer direction on the charts.

The consensus is for the report to print at 0.5% for the third quarter. A better-than-expected figure may boost the Kiwi as it could give the RBNZ one more reason not to follow its other counterparts in easing monetary policy. However, a disappointing figure could convince them to join the bandwagon and therefore, might be bearish for the Kiwi.

[PipDiddy]

When you fall down, you have to pick yourself back up and keep going! This is exactly what Kiwi did yesterday as it fell early in the Asian session but staged a magnificent performance during the U.S. session. The Kiwi opened at .8170, felt to an intraday low of .8138, and then closed the day at .8185.

Earlier today, however, the Kiwi received a big blow due to a very disappointing quarterly CPI. It came in at 0.3%, significantly lower than the 0.5% forecast. A falling inflation rate is usually bearish for the domestic currency because it could lead the central bank to cut interest rates.

No red flags left on Kiwi’s forex calendar, but there are some major reports scheduled to be printed in the U.S. Watch out for those, as they could indirectly affect the Kiwi’s price action.

[PipDiddy]

Look down below! The Kiwi dropped like a rock in yesterday's trading following the release of New Zealand's quarterly CPI report. NZD/USD hit a bottom at .8109 before finally closing the day at .8140, 45 pips below its opening price.

Data released from Middle Ear...err, I mean, New Zealand, revealed that inflationary pressures fell short of expectations for the third quarter. The report printed at 0.3% versus the 0.5% forecast. Although the reading matches the figure for the second quarter, some investors are worried that it could be enough reason for the RBNZ to cut rates. Yikes!

I wonder if the Kiwi will be able to pare some of its losses today given that our forex calendar is blank for reports from New Zealand. Market sentiment will most likely drive the currency's price action, so be on your toes for news that could affect investors' appetite for risk, ayt? Peace!

[PipDiddy]

Despite having absolutely nothing on its economic calendar, the Kiwi proved to be one of the best performing currencies yesterday. Risk appetite was the name of the game, allowing the Kiwi to gain a solid 80 pips over the safe haven Greenback.

The boost in market sentiment came from Moody’s decision to NOT downgrade Spain’s credit rating to junk status. Moody’s, after much deliberation, chose to keep Spain’s credit rating at Baa3 with a negative outlook.

We won’t be seeing any important economic data from New Zealand again today, so the Kiwi’s direction will probably be driven by market sentiment again. If we hear more good news from euro zone, the Kiwi could be indirectly affected and stage another bullish rally.

[PipDiddy]

Tough luck for the Kiwi bulls! Just when we thought that they’re finally gaining muscles, NZD/USD was dragged 28 pips lower than its open price. Yikes!

Okay, maybe the visitor arrivals data had something to do with it. The report showed a 3.3% drop in September, the lowest level in almost a year. The risk aversion that we saw in the U.S. session didn’t help either as it erased most of the high-yielding currencies’ gains against the Greenback.

Only the credit card spending data at 2:00 am GMT is scheduled for release today, so keep an eye out for potential market moving reports from the euro zone and the U.S. Maybe we’ll hear more about what’s going on in the EU Summit this weekend or maybe the existing home sales report from the U.S. would shake up the charts a bit. In any case, make sure you have your stop losses in place!

[PipDiddy]

The commodity-based New Zealand dollar took a small hit last Friday, closing the U.S. trading session 37 pips lower from its opening price that day. It seems that risk aversion was the culprit behind the move as most major currencies also posted losses versus the safe haven dollar.

Only the Credit Card Spending report was released last Friday. The report, which measures the change in the total credit card spending of New Zealanders year-on-year, showed a 1.5% increase. Last month, the rate of increase was at 1.9%. Rising credit card spending is usually interpreted as bullish for the Kiwi because it implies that consumers are confident about their financial standing.

This week, the only major event that’s scheduled to happen in New Zealand’s calendar is the Reserve Bank of New Zealand (RBNZ)'s interest rate decision. It’ll take place on Thursday, and the market expects the central bank to keep rates unchanged at 2.50%.

[PipDiddy]

Phew! The Kiwi bulls breathed a sigh of relief yesterday as the Kiwi broke its losing streak against the Greenback. NZD/USD closed 20 pips higher than its open price after hitting an intraday low at .8148.

Like many of the major economies, the data cupboard was empty in New Zealand yesterday. This is probably why risk sentiment was the name of the game yesterday with high-yielding currencies like the comdolls rising on improved risk appetite in the euro region.

No data will be released from Australia’s trading neighbor again today, but that doesn’t mean that you shouldn’t watch your charts closely! Stay glued to the tube for any reports that might affect risk sentiment, particularly anything about a Spanish bailout or corporate earnings in the U.S.

Good luck trading today, folks!

[PipDiddy]

The Kiwi had its wings clipped yesterday as NZD/USD plummeted from its .8175 open price to a low of .8101 before closing at .8117. What the heck happened and will the Kiwi have a chance to recover today?

New Zealand didn't release any economic data yesterday as the Kiwi reacted mostly to risk sentiment. As it turns out, risk aversion was in vogue yesterday after European and U.S. equities sold off.

The RBNZ is set to make it monetary policy decision at 9:00 pm GMT so we might see a bit of consolidation for NZD/USD prior to the event. Although the central bank is expected to make no changes to their monetary policy for the meantime, make sure you keep your ears peeled for the accompanying statement by new RBNZ head Graeme Wheeler as he makes his very first rate announcement. Expect a lot of volatility during the event!