Daily Economic Commentary: New Zealand

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.

Hah! It looks like the Kiwi also caught the risk aversion flu! Apparently, euro zone debt problems were re-ignited yesterday, which sent the high-yielders scrambling for cover. From its open price of .7721, NZD/USD fell almost 100 pips to close the day very weak at .7626.

New Zealand’s economic calendar today’s presents absolutely nothing to worry about again, so look at the results of the upcoming reports from the U.S. (Trade Balance, Preliminary University of Michigan consumer sentiment survey) for direction. The reports will be key in determining whether NZD/USD will be able to hold above the .7600 this week.

No lovin’ for the Kiwi before Valentines! The Kiwi fell sharply against the Greenback last Friday even though New Zealand didn’t release any economic reports then. It seems that traders were expecting heartbreaking data from the country… and it looks like they were right!

Over the weekend, New Zealand reported that retail sales fell by 1.1% and that core retail sales slumped by 1.2% in December. This was way worse than expectations of a 0.3% drop in consumer spending during the Christmas holidays. What’s worse is that the figures for the previous month suffered downward revisions. Since these reports were released while the forex market was closed, traders would probably show their reactions to these disappointing figures today.

New Zealand’s economic schedule is empty for today, but data due from China could provide some volatility for the Kiwi. Watch out for the release of China’s trade balance, which is expected to narrow from 13.1 billion CNY to 10.5 billion CNY.

The next set of data from New Zealand are due on Wednesday. New Zealand will report its PPI for the last quarter of 2010 at 9:45 pm GMT. This could show that producer input prices rose by 0.4% during the period while output prices increased by 0.7%. Stronger than expected figures could translate to higher consumer inflation, which could provide a reason for the RBNZ to hike rates soon.

Other than those, no other piece of economic data is due from New Zealand for the week. I’d stay tuned for any updates on commodity prices and any changes in market sentiment to figure out whether the Kiwi could rebound this week or not.

Who wants Kiwis? No one?! Hmm… It seems the release of New Zealand’s latest retail sales figures early in the day was enough to keep buyers at bay! After seeing the disappointing numbers, I wasn’t surprised to see that NZD/USD dropped 32 pips to .7573.

New Zealand’s retail sales fell 1.1% in December, which is far worse than the 0.3% drop that was widely expected. OUCH! This decline means consumer spending has now managed to record decreases in two out of the past three months.

Could New Zealand Finance Minister Bill English’s predictions be coming true? Remember, it wasn’t long ago that he warned us about a possible double-dip recession. I’m sure this is one forecast he’s hoping won’t materialize.

We’ve got no reports coming in from New Zealand today. In the meantime, check out what the U.S. has to offer. It might give NZD/USD the push you’ve been waiting for!

Another day, another loss! I’d hate to be in the Kiwi’s shoes right now. It extended its losing streak to 5 against the Greenback yesterday as NZD/USD slipped 65 pips to .7508.

With no economic releases from New Zealand, one possible explanation for the Kiwi’s dive is China’s latest inflation numbers. Yes, China’s CPI was lower than expected, but if you were to eliminate the price of food from the equation, you would see that inflation rose to its highest level in at least six years.

High inflation, of course, adds further pressure for the PBoC to hike rates. Unfortunately, doing so could be detrimental to New Zealand’s exports as it could result in a weaker demand for its goods.

New Zealand’s got another blank economic calendar today. But tomorrow morning, it will be publishing its quarterly PPI input data. A 0.4% rise is expected to follow up the 0.7% uptick in Q3. Stay tuned for this release as a strong reading would imply rising consumer inflation in the future.

Screeech! Bulls finally stepped up and hit the breaks on the dollar’s five-day winning streak against the Kiwi. Yesterday, NZD/USD closed 41 pips higher at .7554 from its opening price.

Aside from risk appetite spurred by a tinge of optimism from the Fed, there was also the better-than-expected report from New Zealand to back the Kiwi up on the charts.

We saw yesterday that manufacturing activity picked up in January with the Business NZ Manufacturing index printing at 53.7 to follow its 53.2 figure in December.

On the contrary though, the PPI report for the fourth quarter of 2010 showed that inflation wasn’t as hot as analysts had predicted.

It showed that output prices, otherwise known as factory gate prices, only rose by a measly 0.2% and fell short of the 0.9% uptick that the market was eyeing. Meanwhile, prices of primary materials that manufacturers use increased by 0.9%, just as expected.

But eh, it seems like traders just shrugged off the disappointing inflation report.

There’s nothing left on our economic calendar for the Kiwi for the rest of the week. Boo! But stay tuned to Fed Reserve Chairman Ben Bernanke’s speech later. If markets find his words giddy enough, we may just see another round of risk appetite fuel the Kiwi’s flight on the charts!

Back to back, baby! The Kiwi was once again able to regain some of its recent losses to the Greenback as it rode a strong manufacturing index reading to Winners’ Town! NZD/USD scurried up 36 pips to finish the day at .7590.

Thanks to the rise in the Business NZ manufacturing index, Kiwi bulls were able to continue their pip-party! The index picked up from 53.2 to 53.7 last month, showing continued expansion in the manufacturing sector. Will this trend continue? Something tells me that given the repairs necessary to rebuild parts of New Zealand after the Canterbury earthquake, we might continue to see this sector post gains in the coming months!

As for New Zealand’s PPI data, we got mixed results. PPI input came in as expected at 0.9% while PPI output fell short of the forecasted 0.9% rise and only showed a 0.2% increase in the price of goods sold by manufacturers. It looks like those hoping to see a rate hike may have to wait until the second half of the year because this report shows inflationary pressures are weak at the moment!

Nothing more to see from New Zealand today! But stay on your toes because my homeboy Ben Bernanke is scheduled to speak at 1:00 pm GMT. His words tend to rock the Greenback, so if you’re looking to trade NZD/USD today, listen closely!

Another day without data, another win on its card! With no economic reports on tap, risk sentiment and commodity prices directed the Kiwi last Friday. Luckily, risk appetite was alive and kicking, and it boosted NZD/USD up 24 pips to .7614.

Commodities were on the rise last Friday so it was no surprise that the Kiwi, as a comdoll, continued to soar. Though its economic calendar was light last week, it managed to record three straight days of gains, thanks to a healthy risk appetite and a bounce in commodities.

The report to look out for this week is the quarterly inflation expectations data due tomorrow at 2:00 am GMT. Last time this release came out, it reported that business managers were expecting a 2.6% rise in prices over the next two years. An upward revision to this figure would imply rising expectations which would strengthen the case for another RBNZ rate hike.