Daily Economic Commentary: New Zealand

Action on NZD/USD yesterday was as intense as my new P90x workout. Bears burned pips during the Asian session and pushed the pair to an intraday low of .7563. From there the bulls took over and hustled NZD/USD to close 15 pips higher from its opening price at .7625.

With still nothing on our economic calendar from New Zealand today, you may want to turn your attention to market sentiment and the roster of reports that we have from the U.S. to help you trade the Kiwi. Good luck and be careful, aight? Peace out!

What a way to set yourself apart, Kiwi! The Kiwi walked tall yesterday as it was the best-performing currency among the comdolls. NZD/USD ended the day at .7693 after climbing 66 pips up the chart.

With no economic data backing its climb, the Kiwi was propelled higher by Greenback weakness and eased concerns over the euro zone.

For today, you’ll have to set your eyes elsewhere if you’re looking to trade the news since New Zealand’s economic docket is empty. U.S. retail sales figures are due today, and maybe disappointing results in this report will give you the NZD/USD rally you’ve been waiting for.

It’s all about giving and taking for the Kiwi! After gaining ground and taking away pips from the Greenback for two straight days, it decided to give back some of its recent gain last Friday. At the end of the New York session, NZD/USD had slid 28 pips to finish at .7668.

The Kiwi was in a familiar situation last Friday with no economic releases to direct it, so it turned to foreign developments for direction. Unfortunately, China decided to raise its reserve ratio last Friday, which shot down demand for commodity currencies. Why so? Well, raising the reserve ratio tends to suppress growth. Now if China’s growth decelerates, it could lead to a decrease in its demand for commodities.

This week, we’ve got a couple of hard-hitters on deck. At 9:45 pm GMT on Wednesday, New Zealand is set to publish last month’s CPI. The index is expected to double its reading from 1.1% to 2.3% in December. Keep a close eye on this release because the RBNZ watches this report closely for its monetary policy decisions.

The following day, still at 9:45 pm GMT, we’ll take a peek at the latest retail sales figures. Can November deliver the 1.3% rise that most had forecasted to follow the 2.5% decline of October? You’ll just have to wait and see for yourself to find out!

With risk appetite on its side, the Kiwi became a rocketeer in yesterday’s trading. NZD/USD rallied past the .7700 psychological handle and tapped an intraday high of .7748 before landing at .7722 to close the day.

Good thing there were enough good vibes to go around and get traders craving for the Kiwi despite negative data.

According to REINZ, house prices declined by 0.6% in December after increasing by 1.9% in November. There was also the food price report for the month that showed easing inflationary pressures in the country. It printed at -0.8% in December, showing continued decline from November’s -0.6% reading.

Our economic calendar is blank for data from New Zealand today. And so, you may want to keep for fingers crossed for risk appetite to stay if you’re planning to root for the comdoll.

Tomorrow we’ll get a better feel of inflation in the country with the CPI report for December due at 9:45 pm GMT. Watch out for a figure higher than the 2.4% uptick that the market is expecting because that will probably be bullish for the currency.

Before that, at 9:30 pm GMT, we’ll have the BNZ-Business PMI for November. Note that a reading better than the 52.7 figure we saw in November would imply improving manufacturing conditions in New Zealand.

Boo hoo! The Kiwi was the only currency that ended lower against the Greenback yesterday. NZD/USD opened at .7722, reached a high of .7742, but closed at .7705. That’s probably because the Kiwi wasn’t able to draw support from fundamentals since its economic calendar is empty… but all that could change today.

Today, New Zealand is set to report the Business NZ manufacturing index and its CPI for the last quarter of 2010. No forecast has been given for the manufacturing index but an improvement over the 52.7 reading for November could be bullish for the Kiwi. Meanwhile, quarterly inflation is expected to be up by 2.3%, higher than the 1.1% rise in price levels previously seen. Watch out for those reports due around 9:30 pm GMT!

The Kiwi was off to a strong start yesterday, as NZD/USD opened at .7704 and rallied to a high of .7788. Later on, its day took a turn for the worse when New Zealand released its quarterly CPI. Because of that, NZD/USD completely erased its gains for the day and closed 5 pips below its daily open price.

The quarterly inflation report met market expectations and posted a 2.3% increase in price levels for the last quarter of 2010. However, components of the report revealed that the rise was due to the government’s move to increase the goods and services tax instead of an actual uptick in price levels. Although the Q4 2010 CPI was higher than the 1.1% reading for the previous quarter, it probably won’t be enough to convince the RBNZ to hike interest rates anytime soon.

Today, New Zealand is set to release its retail sales report at 9:45 pm GMT. After dipping by 2.5% in October, consumer spending is expected to rebound by 1.3% in November. If the actual figure comes in better than consensus, the Kiwi could resume its climb. Stay tuned for that!

Just like the Old Spice guy, NZD/USD swan-dived from its opening price of .7696 all the way down to .7532 before closing the day at .7586. Geronimooo! So what caused the Kiwi’s fall into the pip-deeps?

Bears had the perfect combo of not-so-good fundamentals and risk sentiment up in their coffers during yesterday’s trading. Let’s take a look at them, shall we?

First there was the retail sales report for November. At first glance, it looked good for the Kiwi because it showed that overall consumer spending was up 1.5% and beat the 1.1% forecast after declining by 2.5% in October. However, excluding volatile items, we see that retail sales fell by -0.2% during the month.

On the other hand the positive data from China is said to have sparked risk aversion fueling speculations about another interest rate hike from the PBOC, highlighting the dollar’s safe haven status. It also didn’t help that unlike the data it got for the day, the U.S. economy actually printed better-than-expected figures, making the dollar stronger.

We don’t have anything on tap for the Kiwi today so you may want to gauge market sentiment first before you bet your pips on it. Peace out y’all!

Just like its com-doll sibling aross the Tasman Sea, Kiwi trading was as chill as Pip Surfer whenever he hits the beach. NZD/USD traded within a range of 90 pips, ultimately closing at .7586, its opening price for the day.

While no economic data is scheduled for release today and tomorrow, make sure you keep an eye out on Australian data and news. Australian inflation reports (PPI and CPI) will be released, and depending on the results, could spark a spike in volatility in Aussie trading. With the Kiwi being highly correlated with the Aussie, we could see a ripple effect take place on Kiwi pairs, so watch out.

On Wednesday, the RBNZ will be releasing its interest rate decision. Nobody expects RBNZ head Alan Bollard to hike rates, especially given the current conditions (Australian floods). I’ll be listening to this report, and you should too – you never know if a central banker may drop a hint as to what the RBNZ plans to do in the coming months.

Weeee!!! Risk appetite in markets pulled the Kiwi along the comdolls’ ride up the charts despite the lack of economic reports in New Zealand. NZD/USD climbed by 47 pips after dropping to an intraday low of .7567.

The docket is empty again today, but keep close tabs on any reports that might affect comdoll trading! As a high-yielding currency Kiwi trading is usually affected by the waves of risk sentiment in markets.

Dollar ain’t got nothing on you, Kiwi! After kickin’ it like Adidas at its opening price of .7635 during the European session, NZD/USD traded higher on the latter part of the day and closed at .7675.

Economic gurus say that it was the combo of risk appetite and a relatively weak dollar that allowed the Kiwi to end the day positive. Unlike its comdoll homies, Aussie and Loonie, there wasn’t any economic report released from New Zealand to rain on the Kiwi’s parade up the charts.

With our economic calendar still blank for reports, let’s see if the currency will get lucky with investors for another day. Be on your toes for any shift in market sentiment, ayt? Remember that risk aversion usually doesn’t sit well with Kiwi bulls.

Despite the RBNZ’s decision to leave interest rates unchanged, the Kiwi was still able to end the day with a 31-pip win. NZD/USD skyrocketed just before the New York session came to a close from an intraday low of .7645 to close at .7708.

And not only that! RBNZ Governor Alan Bollard also hinted that he won’t holler any rate hike until the central bank sees a “more robust” recovery. Then again, some economic gurus think that this was relatively more optimistic than the previous statement when a fragile economy was described.

It also helped that the FOMC sounded more dovish than expected. So with nothing on tap on our economic calendar from New Zealand today, make sure you keep an ear out for reports from the U.S.

Good luck!

Whew! Dodged a bullet on that one! The Kiwi ended the day on a near draw against the Greenback last Friday despite the wave of risk aversion in markets. No economic report was released from New Zealand, but NZD/USD capped the day at .7722 after tipping an intraday high of .7794.

Let’s see if the Kiwi can keep its gains coming today. The building consents report yesterday started off on the wrong foot when it declined by 18.6% in December after showing a 7.8% increase in November. Its trade balance report is also giving the Kiwi bulls a reason to flee with its 250 million NZD deficit. Hmm, does this mean that New Zealand’s exports are taking a backseat in the markets?

The labor cost index for the fourth quarter of 2010 is due today at 9:45pm GMT. The price that businesses pay for labor is expected to increase by 0.5% after rising by 0.6% in the third quarter, but a higher number could wipe off some of the Kiwi’s losses early today.

Stay sharp, kids!

Ho humm… NZD/USD was stuck in a range yesterday as it bounced a couple of times from the .7685 area and found resistance near .7740. Is there anything on today’s economic schedule that could trigger a breakout?

But first, a quick review of the recently released economic report from New Zealand. Their labor cost index posted upbeat results as it climbed by 0.6% in the last quarter of 2010, beating the consensus of a 0.5% increase. This means that businesses are paying their employees more, and this increase in cost could eventually contribute to consumer inflation. And we all know what higher inflation could lead to, don’t we? Why, interest rate hikes, of course!

Today, there are no red flags on New Zealand’s economic schedule but the Kiwi could spring into action during the RBA’s rate statement. After all, New Zealand is Australia’s closest trading partner and the outlook for the Land Down Under usually has an impact on NZD/USD’s movement. Make sure you keep your eyes and ears peeled for the RBA policy decision and accompanying statement at 3:30 am GMT.

Up, up, and away! The Kiwi soared higher yesterday after the RBA released a confident monetary policy statement. This boosted the comdolls spirits and allowed NZD/USD to reach the .7800 handle yesterday.

Even though New Zealand didn’t release any economic reports yesterday, the Kiwi was able to gain ground against the U.S. dollar. It turns out that the RBA statement was much more hawkish than expected and the central bank officials expressed confidence that the Australian economy could bounce back after the floods in Queensland.

For today, New Zealand has its employment data on deck. After rising by a full 1.0% in the third quarter of 2010, employment is expected to be up by 0.2% in the last quarter of the year. However, this could still leave the overall unemployment rate at 6.4%. Stay tuned for the actual figures due 9:45 pm GMT because weaker than expected results could force the Kiwi to return its recent gains.

Yikes! The Kiwi took a huge hit against the Greenback yesterday when risk aversion in markets was jumbled with worse-than-expected employment report in New Zealand. NZD/USD ended the day with a 49-pip loss after dropping to an intraday low of .7718.

New Zealand’s unemployment rate rocketed to 6.8% in the fourth quarter from its 9.4% figure in the third quarter last year. Meanwhile, employment fell by 0.5% during the quarter. These numbers signal a weakening labor market, which could motivate the RBNZ to keep its interest rate at current levels. Looks like the bulls will have to look somewhere for an interest rate hike!

Today’s visitor arrivals report at 9:45pm GMT might not be as volatile as the employment report, but a reading lower than December’s 0.5% increase might signal that tourism, one of New Zealand’s cash cows, is also weakening. Uh-oh.

That’s strike two for the Kiwi! The New Zealand dollar plunged against the Greenback for the second day in a row yesterday as risk aversion settled in markets. Good thing NZD/USD contained its losses to a 54-pip hit after dropping to an intraday low of .7690.

It seems that New Zealand’s dismal employment reports released last Wednesday really made their impact because Kiwi bears continued their feast even after the visitor arrivals report clocked in a 1.4% growth in December, up from November’s 0.6% rise. Since tourism makes up a huge part of New Zealand’s GDP, the data should’ve been bullish for the Kiwi.

But the bears ain’t done partying yet! Bill English, New Zealand’s finance minister, stated in his speech yesterday that the Kiwi’s strength is taking its toll on the economy. He also said that the government’s efforts would help relieve the pressure on the currency, but the bearish comments were enough to send the Kiwi down the charts. Look at that, Mr. English! The bears are helping you!

No economic report is on the board today, but be on your tippy toes for the big NFP report from the US today. The data usually produces huge spikes in the charts, so don’t let any shocks catch your trades!

Just like the bird it was named after, the Kiwi just couldn’t fly last Friday! With no economic data to boost it off the ground, NZD/USD was left at the mercy of U.S. data, which sent the pair tumbling 46 pips to .7687.

Last Friday, we also witnessed a dip in commodities. As Forex Gump has discussed in the past, commodities have been on a tear lately, so last Friday’s drop was quite unusual. Given the Kiwi’s status as a “comdoll,” this may have been one of the reasons why the Kiwi was left grounded.

Sadly, it looks like the New Zealand’s news dry spell will continue this week. We’ve got an extremely light week ahead of us as far as economic data is concerned. In the meantime, you might be better of catching the releases of Australia and the U.S. to help you determine where the Kiwi is headed this week.

The Kiwi’s price action was as exciting as watching water boil especially when markets were quiet and New Zealand didn’t release any economic report. NZD/USD ranged for most of the day yesterday, and closed only 6 pips higher than its open price at .7701.

The pip boards are empty again today, but watch the market airwaves closely, will you? I hear that Canada and Australia are releasing economic reports today, so the fellow commodity-related Kiwi might be dragged along for the pip rides.

Yawn… What interest rate hike? The Kiwi bulls shrugged off China’s interest rate hike yesterday as if it was another episode of [I]Parental Control[/I]. Even without any economic report from New Zealand, NZD/USD climbed by 45 pips and even reached an intraday high of .7788 before ending the day at .7746.

No reports are due for release again in New Zealand today, but keep your eyes on any delayed reaction to China’s interest rate hike! The Australian and New Zealand dollars usually drop on these instances because their export demand is highly dependent on China’s demands, but we’ll never know if some comdoll bears were just watching the latest episode of [I]How I Met Your Mother[/I] and just learned of the news now!

Cue the sad trombone, ‘cause the Kiwi’s feelin’ down! Disheartening words from New Zealand’s finance minister dampened the Kiwi’s spirit as NZD/USD fell 25 pips and closed at .7721.
New Zealand may not have rolled out any reports yesterday, but Finance Minister Bill English’s words were enough to get a bit of action from the currency. According to the finance top dog, New Zealand runs the risk of falling into recession again if the the latest quarterly GDP report shows economic contraction.

He added that New Zealand’s excessive debt is the main culprit behind its weak growth. He estimates a double-dip recession may take place if GDP records a 0.1%-0.2% drop. Woo! It seems there’s a lot on the line for New Zealand on this particular release.This only means that we’ve got a potential market-mover when the report is published next month!

Nothing big to look forward to today. The only report due in the next 24 hours is the the food price index at 9:45 pm GMT. Following December’s 0.8% decrease in food prices, a further decline may be indicative of weak future consumer inflation and could possibly weigh down the Kiwi.