Daily Economic Commentary: New Zealand

The Kiwi benefitted from the wave of risk appetite the occurred all throughout the European and US sessions. The NZDUSD closed at a one month high and is currently trading above the 0.7100 handle. Will the Kiwi bulls continue to surf upstream?

The Westpac consumer sentiment report released late yesterday fell for the second consecutive month, printing a reading of 114.7, down from the previous month’s score of 116.9. This indicates that consumer confidence is slowly falling, but that consumers still remain optimistic over the economy. Still, traders ignored this report, as they hitched a ride on the run of increased risk appetite.

Once again, we’ve got no major data coming out from New Zealand, but that doesn’t mean you should chill out and go surfing with Pip Surfer! Make sure that you’re aware of any economic data coming out from other countries so you won’t unexpectedly get wiped out.

The Kiwi hit the high notes yesterday as it climbed to a high of 0.7179 against the greenback. Even though New Zealand didn’t release any economic reports then, the Kiwi was able to deliver a stellar performance as the upbeat sentiment for the commodity-based economies provided a boost.

Strong economic data from Australia and Canada, New Zealand’s fellow export-dependent nations, allowed the commodity currencies to extend their gains against the greenback. On top of that, an RBA official remarked that rates would probably rise further while the Canadian Industry Minister noted that their exports are no longer dampened by the loonie’s rise. Talk about a major confidence boost for the com-dolls!

Moving along… New Zealand is set to release its visitor arrivals report for February at 9:45 pm GMT today. Since tourism plays a huge role in New Zealand’s overall economic activity, this report could have a significant impact on the Kiwi’s movement. A decline of 2.4% was seen in January and the Kiwi would most likely appreciate a strong rebound.

After two big days, the Kiwi suddenly turned on its snooze mode and traded flat against the greenback yesterday. The NZDUSD pair actually just traded within a 56-pip range, closing at 0.7147 from 0.7141.

No economic reports came out of New Zealand yesterday. The absence of economic flows from New Zealand was perhaps the reason behind the Kiwi’s lack of price action.

Visitor arrivals in New Zealand for the month of February, which was released earlier today, fell again by 1.9% after already sliding by 2.3% in January. Tourism is one of New Zealand’s major industries. A drop here does not reflect positively on its economy and could be bearish for the Kiwi. The report, however, did not have much impact on the NZD’s short term valuation.

No other major economic reports are due today in New Zealand. The Kiwi, however, could experience some volatility later when Canada’s retail salesand CPI figures are released. Positive numbers in these accounts could spark some risk taking, benefiting the anti-dollars like the Kiwi.

After topping out at 0.7180, the NZDUSD found itself dropping back to 0.7070 last Friday. It seems that risk aversion from all the uncertainty surrounding Greece spilled over to the NZDUSD, pushing it right back near its week open price.

Two important reports are coming out of New Zealand this week.

First up is the country’s current account balance on Tuesday. A 1.59 billion NZD deficit balance is expected for the final quarter of 2009, slightly higher from the 1.41 billion NZD deficit from the third quarter.

On Wednesday, the country’s GDP report will be released. It is expected to show that the country grew by 0.8% during the last quarter of the previous year. This comes on top of the 0.2% expansion seen the quarter before. For the entire of 2009, the country is predicted to have grown by 0.4%. If the actual figure comes in higher than forecast, we could see the NZDUSD be bought up by currency traders.

The NZDUSD took a dive into the deep end and had some trouble coming back up for air. After plunging to as low as 0.7001, the NZDUSD swam back up, enabling it to finish the day in the shallow end at 0.7065.

We could see some movement later tonight, when current account figures are released. The deficit is expected to widen from 1.43 billion NZD, to 1.60 billion NZD in the 4th quarter of 2009. Did the holiday season have an effect on trade? We’ll have to wait and see.

The Kiwi struggled to stay afloat during yesterday’s trading but New Zealand’s current account balance weighed it down. Would their GDP release today cause another disappointment?

New Zealand’s current account deficit unexpectedly widened to 3.57 billion NZD in the fourth quarter of 2009. That’s more than twice as much as their previous quarter’s deficit! Components of the report showed that an increase in foreign investment income was the primary reason for the wider deficit.

Today, New Zealand is gearing up to release its GDP reading for the fourth quarter of 2009. Could it chalk up 0.8% growth, four times the previously seen 0.2% expansion in the third quarter? My buddy Forex Gump has a bunch of interesting thoughts on that so I suggest you go check it out here! If the actual figure fails to impress, the Kiwi might be forced to give up its recent gains.

The Kiwi closed mixed yesterday as it closed positively against the yen but dropped versus the dollar. The NZDJPY rose to and closed at 64.79 from 63.95. The NZDUSD, on the other hand, slid to 0.7020 from 0.7075.

Earlier today, New Zealand’s GDP growth for the fourth quarter of last year was published. New Zealand’s economy showed a promising 0.8% expansion from October through December of last year, which is four times the 0.2% gain that it had during the previous third quarter. This growth, however, is very much in line with the market’s estimate which is the reason why the NZD failed to rise despite the positive result.

Later at 9:45 pm GMT, New Zealand’s February trade balance will be on deck. Its trade surplus likely expanded to N$355 million from N$269. An expansion in this account could give the NZD some short term boost.

The NZDUSD went for a wild ride in yesterday, rallying strongly during the European session but eventually giving up its gains once the US trading session went underway. The pair closed the US trading session at 0.7042, hardly changed from its Asian open price of 0.7020.

Earlier today, New Zealand’s trade balance was released. It failed to meet expectations, posting a N$321 million surplus only for February, instead of N$355 million like initially expected. Still, it was an improvement from January’s N$263 million surplus. According to the report, the uptick was mainly caused by the rise in commodity prices and the unexpected jump in farm exports.

No more data coming out today so expect the NZDUSD to be primarily be driven by data coming out risk aversion-appetite flows. The ongoing EU summit could indirectly have an effect on the NZDUSD’s value.

The Kiwi stayed within range once again, as there was no major news to provide fuel for a strong move. The NZDUSD closed right smack at its opening price of 0.7037 to end Friday.

Tonight, building consents figures will be available at 9:45 pm GMT. Building approvals have fallen the past two months by over 2.0%. Will we see an upside surprise? Or is a new trend developing?

Later this week, the NBNZ business confidence index will also be released. February’s reading of 50.1 was the highest figure ever since the recession began, indicating that businessmen are becoming more and more optimistic. If the report comes in to top it, we could see some Kiwi buying take place.

The Kiwi was able to make some progress in yesterday’s trading as it rallied to a high of 0.7117 against the US dollar. Would it be able to hold on to its gains or even push for more today?

Only the building consents data was released from New Zealand yesterday. The report printed a 5.9% increase for February, a strong rebound over the 2.8% slide seen in January. This marked the indicator’s first increase in three months as low interest rates spurred construction activity.

New Zealand won’t be releasing any economic reports today so risk sentiment could be the main driver of the NZDUSD’s price action. Bear in mind that the US is set to release its consumer confidence report at 2:00 pm GMT. Although the index is expected to post an improvement, weaker than expected results could dampen risk appetite and force the Kiwi to return its recent gains.

The Kiwi closed mixed against the dollar yesterday. After reaching a high of 0.7133 from 0.7092, the pair fell and settled at 0.7094.

No economic reports were due in New Zealand yesterday. The lack of economic flow from the country may have caused the Kiwi to just trade in a range-bound fashion.

Today (3:00 am GMT), New Zealand’s NBNZ business confidence index for the month of March will be released. Last month, the index logged a score of 50.1, which was the first time the index came over 50.0 in more than 10 years. A mark above 0.0 indicates optimism in New Zealand’s economy. A better tally in March, therefore, would reflect positively on the economy and the NZD.

The NZDUSD was directionless in yesterday’s trading session and just bounced around a tight 50-pip range. The pair closed the US session hardly changed at 0.7107, just a mere five pips higher from its Asian session opening price.

The NBNZ business confidence index released yesterday printed a reading of 42.5, lower than February’s 50.1 reading. This means that businesses became less optimistic about New Zealand’s economic conditions, which gave reason to believe that the RBNZ would keep true to its commitments to hold interest rates at 2.5% until mid-2010.

No data coming out but keep please do keep in mind that a lot of major banks will be closed in observance of Good Friday tomorrow. Because of this, we could see some volatile moves later in the European session as traders take profit prior the long weekend.

Trading was so peaceful on the Kiwi front, that I could hear sheep chew on the grass! Okay, not really, but trading was pretty tight, as the NZDUSD stayed within at 35 pip range, closing at 0.7059.

Tonight, at 10:00 pm, the NZIER Business Confidence index is scheduled for release. The index, which measures business confidence amongst managers, last came in with a reading of 31. Take note, scores above 0 reflect growing optimism, while negative scores indicate pessimism. If the index shows a much higher score than the previous release, it could send the NZD higher.

As for the rest of the week, not much coming out but look out for the RBA rate statement coming out on Tuesday. If the RBA sees it fit to raise rates once again, this could be an influencing factor for the RBNZ to raise rates as well.

The Kiwi was unable to soar yesterday as New Zealand’s index of business confidence slid down during the first quarter of 2010. As a result, the NZDUSD stayed below the 0.7050 mark and dipped to a low of 0.7020 by the end of the London session.

The NZIER business confidence report showed that, although businessmen remained optimistic for the first quarter, the reading fell from 31 to 22 during the period. This implies that fewer businessmen are expecting economic conditions to improve over the next six months.

New Zealand won’t be releasing any economic reports today so keep an eye out for the other top-tier releases on deck. First, there’s the RBA rate decision at 12:30 am GMT. An interest rate hike from Australia’s central bank could provide support for, not only the AUD, but also its fellow commodity-based currencies. Also, the US FOMC will be releasing the minutes of their latest monetary policy meeting. Upbeat comments from Fed officials could spur risk appetite, giving the Kiwi a boost.

The Kiwi made a strong rally during the start of the US session to overcome huge deficit against the USD. The NZDUSD rose to and closed at 0.7067 from 0.7029 after touching a low of 0.6965.

The NZD, alongside the EUR and other anti-dollars, fell when some news that Greece may not look to the IMF for help went out. The NZD, however, recovered its losses given the rally in the US equities markets. Traders and investors sold off the USD for higher yielding assets, pushing the equities and other currencies like the NZD higher.

No economic reports are due in New Zealand today. Given the lack of economic flows, the NZD could just trade in a range bound fashion.

The lack of economic data from New Zealand kept the Kiwi range bound in yesterday’s trading session. The NZDUSD closed out the US trading session at 0.7077, barely changed from its Asian session opening price of 0.7067.

Just like yesterday, New Zealand’s data cupboard for today is completely empty. Given this, we could see the NZDUSD just bounce around the previous day’s highs and lows today.

Range, range, range… That’s all the NZDUSD has been doing as of late! The pair traded within a range of about 70 pips yesterday, to close the day at 0.7062.

Once again, nothing scheduled on the economic calendar for New Zealand, so we can probably expect the pair to continue its up and down movement from the past week or so. Do watch out for AUD and CAD trading – if those two pairs continue to make new highs, they may drag the NZD along with them.

The Kiwi took flight last Friday, carrying the NZDUSD to a high of 0.7174 during the US session. New Zealand didn’t release any economic reports then but the improvement in risk appetite gave the com-dolls strength to take down the greenback.

In terms of economic reports, this week’s coast seems to be clear in New Zealand. Except for the retail sales figures due tomorrow, no other economic reports are set for release. Retail sales in New Zealand are expected to climb by 0.3% in February, a slightly slower increase compared to the 0.8% growth seen in the previous month. Core retail sales are expecting a 0.4% uptick in February.

A stronger than expected retail sales report could give the Kiwi a boost and, if risk sentiment stays on its side, the NZDUSD could retest its 2010 highs at the 0.7440 area.

Like most of the anti-dollars, the Kiwi opened strong yesterday. The lack of positive catalyst, however, caused it sink at the end of yesterday’s session. The NZDUSD settled at 0.7120 from 0.7190.

New Zealand did not release any economic data. The drop in commodity prices during the US session, though, placed some selling pressure on the higher yielding currencies like the Kiwi. Crude oil, for one, fell by 0.7% to close at $84.34 per barrel.

Later at 10:45 am GMT, New Zealand’s February retail sales will be on tap. The headline retail sales are seen to have gained by a marginal 0.2% in February on top of the 0.8% rise it had during the previous month. The core account, which excludes automobile sales due to its volatility, likely rose again by 0.3%. Retail sales are directly linked to the country’s overall domestic consumption. An expansion in the accounts, therefore, could be bullish for the Kiwi especially if they print some better than projected numbers.

Due to the absence of economic data yesterday, the NZDUSD found itself stuck in a tight range. The NZDUSD ended the US trading session at 0.7104, just a mere 16 pips lower from its Asian session opening price.

Earlier today, the NZDUSD took a major hit when its retail sales report failed to meet expectations. It showed that sales in February dipped by 0.6%, instead of increasing 0.2%. The core version of the report, which excludes vehicle sales, likewise came in worse-than-expected and printed a 0.9% decline. Looks like the Reserve Bank of New Zealand has more reason to keep its commitment to hold off on doing any rate hike until the second half of 2010…

No more data coming out of New Zealand for the rest of the day so traders will most likely look at news coming out of the US (consumer price indexand retail sales report) for possible clues on where the NZDUSD is headed.