Daily Economic Commentary: New Zealand

[PipDiddy]

What a coup by the Kiwi bulls! Thanks to positive comdoll data, NZD/USD capped the day with a nice 33-pip gain at .8151. So what exactly were the comdoll bulls so happy about?

China started the comdoll party yesterday when the HSBC manufacturing PMI inched higher and came in close to the 50.0 expansionary level. Australia also contributed to the mix with its inflation report which lessened the possibility of an interest rate cut.

New Zealand wasn’t a freeloader either as bets of a less-dovish-than-expected RBNZ interest rate decision boosted the Kiwi ahead of the actual event. The optimistic Kiwi traders got it right though! New RBNZ head Graeme Wheeler wasn’t too hawkish or dovish in his first interest rate announcement.

Though he recognized that the global economy isn’t at its top shape, he also said that New Zealand’s GDP is still rising at a moderate pace and that inflation is expected to return to its comfortable levels in the foreseeable future. So no rate cuts from the RBNZ this month, folks!

Let’s see if New Zealand will follow up its positive reports when the trade balance data is released at 9:45 pm GMT. The report is expected to show the country in deeper trade deficit, but keep your eyes peeled in case we see any surprises!

[PipDiddy]

Another bullish day for the Kiwi! Thanks in part to better-than-expected trade balance data, NZD/USD found itself revisiting the top of a falling trend line. It ended the day 38 pips higher at .8152.

New Zealand's trade deficit surprisingly narrowed from 809 million NZD to 791 million NZD last month, going totally against forecasts which called for an expansion to 838 million NZD. Apparently, exports rose about 5.1% last quarter as shipments of dairy products surged by 16%.

In other news, the NBNZ Business Confidence index ticked up from 17.0 to 17.2 in the month of October. Business confidence seems to have flattened out, as only 17% of the businesses surveyed think that business conditions will improve in the coming year - the exact same as last month.

No more reports from New Zealand today. In the meantime, check out what the U.S. has in store in you plan on trading NZD/USD!

[PipDiddy]

It took a strong, last minute rally in the New York session for NZD/USD to keep its head above water. After dipping to as low as .8157, the Kiwi staged its comeback, forcing the pair to end 9 pips above its opening price at .8223.

As I had mentioned last Friday, New Zealand rolled out a couple of upbeat reports to end the week.

First, it showed an unexpectedly slimmer trade deficit (from 801 to 791 million NZD), then it followed up with an uptick in the NBNZ business confidence index (17.0 to 17.2). It's hard to say for sure if these reports were the reason the Kiwi avoided defeat against the Greenback since the market's reaction to these releases were a bit subdued, but then again... it couldn't have hurt!

Not much on the economic calendar for New Zealand this week.. just a couple of tier 3 reports! In the meantime, I suggest you keep tabs on the U.S. and risk sentiment if you plan on trading NZD/USD. Good luck bagging those pips, homies!

[PipDiddy]

The Kiwi had a poor start the the week as risk aversion snuffed demand for the high-yielding currency. NZD/USD spent little time trading above its opening price, and at the end of the New York session, it closed 32 pips lower at .8190.

The Kiwi was at the mercy of risk sentiment yesterday, and unfortunately, sentiment favored the bears. Today, it looks like Kiwi price action will continue to be dictated by the market's risk appetite, since we don't have any major New Zealand reports on tap.

In the meantime, I suggest you monitor developments in the U.S. about Hurricane Sandy. The storm was responsible for closing the stock markets, and it seems to be causing traders to seek refuge in the safe haven Greenback at the moment.

[PipDiddy]

The Kiwi was able to erase a chunk of its losses from Monday as risk sentiment favored high-yielding currencies yesterday. NZD/USD traded as high as .8235 before it settled at .8206, up 16 pips on the day.

Sometimes, no news is good news! Although New Zealand didn't publish any reports yesterday, the Kiwi had no trouble finding buyers as the markets favored the comdoll over the safe haven Greenback.

Earlier today, New Zealand broke the silence with its building consents report, but even that failed to get the markets moving. It printed an increase of 7.8% for the month of September, which is quite an awesome followup to the 2.8% uptick we saw in August.

Sadly, that's all we'll get from New Zealand today, so it looks like you'll have to keep an eye on the U.S. and risk sentiment if you have plans of trading NZD/USD. Good luck and happy pippin', folks!

[PipDiddy]

If you’re a range trader, then the Kiwi was probably one of the currencies that you traded yesterday. After opening the day at .8207, the Kiwi simply trade within a relatively tight 29-pip range, finding resistance at the .8230 level and support at the .8200 major psychological handle.

No major economic news report was released yesterday and we won’t be seeing any again today. This means that the Kiwi’s price action will be dictated by events happening in other major economies.

The euro zone, for instance, has a lot on its economic plate today, so there are a lot of potential catalysts for a sentiment shift. You should head on over to my daily economic roundup on the euro zone for more information!

[PipDiddy]

Just like its comdoll siblings, the Kiwi was quite impressive in yesterday’s trading matches. NZD/USD broke out of its consolidation, rising 43 pips to finish the day at .8267. The question is, can the bulls continue their good fortune?

The Kiwi may have benefited from a nice run by commodities, which, along with futures, traded slightly higher yesterday. Whether this can continue or not will depend on the reaction to tonight’s NFP report. Take note that with New Yorkers still adjusting after the recent storm, we could see some really wacky moves today, so watch out!

[PipDiddy]

The Kiwi joined the other comdolls and higher-yielding currencies last Friday, as it got side tracked and ended the week with a loss. NZD/USD finished 26 pips below its opening price to end at .8242.

Will the Kiwi stay resilient this week or was Friday’s move some foreshadowing of what’s to come?
For this week, we’ve got a couple of red flags that could rock the Kiwi’s socks.

First, the Reserve Bank of New Zealand will be releasing its financial stability report tomorrow at 8:00 pm GMT. The report should include the bank’s thoughts on interest rates, the economic outlook, and GDP growth. If it indicates that central bankers are a little bit more cautious than they’ve been in the past, it may be taken as a sign that the bank is open to even more accommodative policy measures.

On Wednesday, employment data will be available, with expectations being that the unemployment rate dropped from 6.8% to 6.7%. If the report shows that even more people were hired during the 2^nd quarter, it could provide some nice support for the Kiwi bulls.

[PipDiddy]

Boooring! Without any economic data on tap from New Zealand, NZD/USD merely traded around the .8250 minor psychological handle before finishing the day 2 pips above its opening price at .8244.

But don't fret! Later on in today's trading at 8:00 pm GMT, the RBNZ will release its Financial Stability report. It's not known to be a big market-mover, but who knows, the central bank's economic outlook in the coming months may just dictate the Kiwi's price action. Keep tabs on it!

[PipDiddy]

Thanks to a nice rally in commodities, the Kiwi was able to run up the score versus the dollar yesterday. NZD/USD rallied 33 pips to finish at .8277. Do the bulls have enough juice to push the pair up to former highs around .8350?

Earlier, the Reserve Bank of New Zealand released its financial stability report, and to the surprise of the markets, it maintained a rather upbeat tone.

According to RBNZ head honcho Graeme Wheeler, the Kiwi economy has strengthened despite the lingering problems in the U.S. and euro zone. He also gave a shout out to Kiwi banks, saying that they’ve worked hard to meet the RBNZ’s liquidity and capital requirements, giving them a bigger buffer to withstand shocks to the economy.

Late tonight at 9:45 pm GMT, employment figures are scheduled to hit the deck. My spies tell me that the number of New Zealanders employed rose by 0.3% in the past month, which would be a nice turnaround from the 0.1% decline we saw the month before. If this comes in much better than expected, it could push NZD/USD up to resistance around .8350.