Daily Economic Commentary: New Zealand

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.

With some U.S. traders still out on break, action on NZD/USD yesterday was as flat as a pug’s face. It traded within a 45-pip range but lucky for the Kiwi, there were enough bulls to push it 9 pips higher from its opening price. At the end of the day, it was at .7638.

Perhaps the rise in commodity prices offset the bad vibes that came from the worse-than-expected services PMI and worries about the ongoing conflict in the Middle East. It was reported that New Zealand’s service sector activity slowed in January when the index came in lower at 50.8 than its previous reading at 52.1.

Then again, the increase in consumer spending might have also helped the Kiwi stand its ground against the scrilla. The credit card spending report for January printed at its 9-year high at 5.1% yo!

Earlier today, we saw that inflation expectations remain flat at 2.6% for the first quarter of the year. I wonder if this will be enough for the Kiwi to hold on to its gains amid risk aversion. Make sure you gauge market sentiment ayt? Good luck!

The Kiwi dropped like a rock across the board yesterday as a huge earthquake hit New Zealand yesterday. News reports said that the 6.3 magnitude earthquake took at least 65 casualties and the damages it caused could weigh down heavily on the economy. At the end of the day, NZD/USD was trading at .7457, 181 pips lower from its opening price.

Nothing on New Zealand’s economic calendar today, so it would be best to monitor the earthquake situation in the region. Similar to yesterday, it would probably dictate the Kiwi’s direction.

What a slow day! The absence of economic reports kept NZD/USD bound within an 80-pip range yesterday. It found resistance at its day high at .7514 and support at .7434. At the end of the day, NZD/USD closed at .7462, a mere 5 pips higher from its opening price.

New Zealand’s economic calendar has nothing to offer again today, so NZD/USD’s price action could mimic yesterday. Keep a close eye on the previous day’s highs and lows as they could very well hold!

After dipping to its intraday low at .7430 against the dollar, the Kiwi braced itself and sang, “Up, up, here we go!” It then became a rocketeer for the rest of the day’s trading, peaking at .7510 before landing at .7484 with a 24-pip win.

We didn’t have any economic report from New Zealand. Good thing mixed economic reports from the U.S. might have convinced traders to dump their dollars.

Perhaps rising oil prices also added to the dollar’s weakness. Word on the street is that some central banks may be forced to hike interest rates soon to tame inflation spurred by increasing commodity prices. But since inflation is muted in the U.S., traders aren’t expecting the Fed to holler a rate hike soon.

Speaking of interest rates, rumor has it that the RBNZ could cut interest rates in March. Yep, [B]CUT[/B] interest rates. Economic gurus are saying that with the damage of the Christchurch quake estimated at 12 billion NZD, the central bank could lower rates to help spur growth.

With that said, remember to be extra careful when you trade the Kiwi, ayt?

Oh Kiwi, you’re so fine you blow my mind! The absence of economic reports was no problem for the comdoll as NZD/USD ended Friday’s trading 24 pips higher from its opening price at .7509. And that’s three wins in a row for the Kiwi yo!

Economic gurus think that perhaps traders are getting tired of the dollar with murmurs of QE3 going around. With that said, perhaps the better-than-expected trade balance report for January will give traders more reason to dump the dollar in exchange for the Kiwi. Earlier today, it was reported that exports outpaced imports by 11 million NZD during the month and overshot expectations which were for a trade deficit of 25 million NZD.

Don’t get too giddy rooting for the Kiwi though. Remember that later we’ll also have the NBNZ business confidence report for February at 2:00 am GMT. Watch out for a figure higher than December’s reading of 29.5 because this will most probably be bullish for the Kiwi. But err, I wouldn’t keep my hopes up for the figure to reflect optimism from manufacturers after the devastating earthquake that hit Christchurch last week.

The Kiwi sure likes its pips fast and its retracements down low! Improvement in risk appetite and better-than-expected reports from New Zealand boosted NZD/USD to its intraday high of .7554, with the pair eventually capping the day 29 pips higher than its open price at .7523.

The NBNZ business confidence report might have given the Kiwi a lift when clocked in at an index number of 34.5 in February against January’s 29.5 figure. Then, the overseas trade index data also showed a gain of 0.6% for the fourth quarter, which is a lot better than the 3.0% growth in the third quarter last year.

Only the ANZ commodity prices report today at 2:00 am GMT is scheduled for release in New Zealand, so keep an eye on risk sentiment!

The Kiwi dropped faster than a Travis Barker beat to its 10-week low at .7384, before ending yesterday’s trading at .7432 with a 48-pip loss to the dollar. Ouch! Why?

Well, what we saw yesterday was another classic case of loose lips, sink pips.

New Zealand Prime Minister John Key said that he won’t be surprised if the RBNZ cut interest rates to help stimulate economic growth following the Christchurch earthquake. Duhn duhn, duhnnnn!

Although the government’s head honcho didn’t ask the RBNZ to reduce rates outright, a lot of traders think that RBNZ Governor Alan Bollard might still be pressured to do so nonetheless.

We don’t have anything on tap from New Zealand today, so you may want to pay attention to market sentiment and see if there will be enough risk appetite for the Kiwi to pare some of its losses. Good luck!

It’s strike three for the Kiwi! NZD/USD fell for a third day in a row yesterday when the U.S. printed better-than-expected economic reports. The pair tipped to an intraday high of .7474 before calling it quits 17 pips lower than its open price at .7415.

Aside from positive reports in the U.S., the Kiwi might have been also weighed by the escalating rumors of an interest rate cut by the Reserve Bank of New Zealand. Apparently, the recent earthquakes in New Zealand could weigh economic growth figures, so the RBNZ is contemplating a possible interest rate cut to encourage spending and investment.
No reports are due today in the Land of the Maoris, but the U.S. has a chock full of potential big hitters. Among them is the big NFP report, which will be released at 1:30 pm GMT. The data usually inspires crazy volatility in markets, so keep your eyes glued to the tube!