By FXEmpire.com
Outlook and Recommendation
The NZD/USD is holding at .8221 at the end of the month, close to the middle range for the pair in April, unknowing of the huge surge in unemployment coming in early May that will push the kiwi under the 0.79 price.
The stability of the New Zealand dollar (NZD) throughout March and April has been impressive, however the central bank continues to warn that should NZD remain elevated it will need to adjust its neutral policy stance.
Accordingly, central bank action should act as a ceiling for the NZD. Investors are net long NZD, but with a relatively small position outstanding are unlikely to substantially sway the market. We hold a Q212 NZDUSD forecast of 0.82 and a yearend target of 0.83.
The economic recovery in New Zealand is underway, but at a modest pace. The reconstruction process after the Christchurch earthquake in 2011 has been slow and the unemployment rate remains high; however, the recent improvement in business and consumer confidence together with rising house prices have enhanced the economic outlook. In late April, the Reserve Bank of New Zealand (RBNZ) left the official cash rate unchanged at 2.5%, where it has been since a year ago. However, the authorities confirmed concerns over the strength of the currency, despite recent commodities price deceleration which could bring a revision to the monetary policy stance .
Central Bank Name: Reserve Bank of New Zealand
Date of next meeting or last meeting: Jun 14
Current Rate: 2.50 % (- 0.50)
Statement highlights of last meeting: The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent. Inflation has settled near the middle of the Bank’s target range, and inflation expectations have fallen. The domestic economy is showing signs of recovery. Household spending appears to have picked up over the past few months and a recovery in building activity appears to be underway. That recovery will strengthen as repairs and reconstruction in Canterbury pick up later in the year. High export commodity prices are also helping to support a continuing recovery in domestic activity.
Economic events for the month of May affecting AUD,CNY,JPY,NZD and USD
|
Tuesday, May 01 |
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|
00:30 |
AUD |
Interest Rate Decision |
3.75% |
4.00% |
4.25% |
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|
00:30 |
AUD |
RBA Rate Statement |
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|
10:00 |
USD |
ISM Manufacturing Index |
54.8 |
53.0 |
53.4 |
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|
Wednesday, May 02 |
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|
08:15 |
USD |
ADP Nonfarm Employment Change |
177K |
209K |
||||
|
18:45 |
NZD |
Unemployment Rate |
6.3% |
6.3% |
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|
Thursday, May 03 |
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|
08:30 |
USD |
Initial Jobless Claims |
380K |
388K |
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|
Friday, May 04 |
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|
08:30 |
USD |
Unemployment Rate |
8.2% |
8.2% |
||||
|
08:30 |
USD |
Nonfarm Payrolls |
170K |
120K |
||||
|
Thursday, May 10 |
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|
21:30 |
CNY |
Chinese CPI (MoM) |
0.2% |
|||||
|
21:30 |
CNY |
Chinese CPI (YoY) |
3.6% |
|||||
|
Wednesday, May 16 |
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|
19:50 |
JPY |
GDP (QoQ) |
-0.2% |
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Click here for updated NZD/USD News.
Originally posted here
