The NZD/USD pair dropped to surrender its previous gains, as the US dollar soared against most of its major counterparts as a safe haven currency, while the Kiwi and other higher-yielding currencies retreated due to risk aversion.
Concerns regarding the EU region outlook increased, after Standard & Poor’s announced it may cut the credit ratings for France, Germany and other countries from the EU region.
On the other hand, the Reserve Bank of New Zealand kept the rate steady at 2.50%. The central bank cleared that the domestic demand is growing in a moderate pace, while uncertainty dominates the global economy outlook due to the current EU debt crisis.
The current monetary policy for the RBNZ reduced demand for the Kiwi, as the central bank is comfortable with the current interest rate level which pushed investors to shift their investment to other currencies.
The expectations refer to further drop for the NZD/USD pair, where the current market sentiment and the RBNZ outlook do not support the Kiwi or higher-yielding assets.
Major highlights for this week that will affect the NZD/USD pair’s trading:
Monday December 12:
On Monday at 21:00 GMT, the New Zealand economy will release the Westpac NZ Consumer Confidence for the fourth quarter where the previous reading was 112.
The U.S. economy will release the Monthly Budget Statement for November at 19:00 GMT where the deficit is expected to wider to $150 billion from $98.5 billion.
Tuesday December 13:
The United States will release the Advance Retail Sales Index for November at 13:30 GMT where it is expected with 0.6% rise after 0.5%.
The U.S. Business Inventories for October will be released at 15:00 GMT where it’s expected to come at 0.3% from the previous reading of 0.0%.
At 19:15 GMT, the Federal Reserve Bank will announce the Federal Open Market Committee Rate Decision, where the central bank is expected to keep the rate steady near zero.
Wednesday December 14:
On Wednesday at 21:30 GMT, the New Zealand economy will release the Business NZ PMI for November where it had a previous reading of 46.5.
At 13:30 GMT, the U.S. economy will release the Import Price Index for November where it is expected to rise by 0.9% after 0.3% drop.
Thursday December 15:
The U.S. economy will release the Producer Price Index for November at 13:30 GMT where it’s expected to come at 0.2% from the previous reading of -0.3%. The annual Producer Price Index is expected to rise to 6.0% from the previous reading of 5.9%.
The U.S. Current Account Balance for the third quarter will be up at 13:30 GMT and the deficit is expected to narrow to $107.7 billion from the previous deficit of $118.0 billion.
The Empire Manufacturing Index for December will be released at 13:30 GMT where it’s expected to come at 2 from the prior reading of 0.61.
At 13:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 381 thousand last week.
The Net Long-term TIC Flows for October will be up at 14:00 GMT, where the previous reading was $68.6 billion, as for the Total Net TIC Flows it had a previous reading of $57.4 billion.
The U.S. Industrial Production for November will be released at 14:15 GMT, where it’s expected to come at 0.2% from the previous of 0.7%. The Capacity Utilization for November is expected to come at 77.9% from the prior 77.8%.
The Philadelphia Fed index is due at 15:00 GMT for December and expected to rise to 5.0 from 3.6.
Friday December 16:
On Friday, the U.S. economy will release the Consumer Price Index for November at 13:30 GMT, where the prior reading was down by 0.1% and expected to come at 0.1%. As for the annual reading it’s expected to remain steady at 3.5%.
Originally posted here
