By FXEmpire.com
Introduction: The recent strength of the kiwi, a currency sometimes overlooked by traders, made its moves much more predictable. This applies to support and resistance lines alike. This is a very safe pair to trade, not a great deal of volatility but predictability.
Weekly Analysis and Recommendation:
The NZD/USD traded higher against the USD at the close of the week, after the rate decision and statements from the Reserve Bank.
|
Date |
Open |
High |
Change % |
||
|
Apr 27, 2012 |
0.8221 |
0.8132 |
0.8234 |
0.8107 |
1.09% |
|
Apr 26, 2012 |
0.8132 |
0.8154 |
0.8190 |
0.8118 |
-0.27% |
|
Apr 25, 2012 |
0.8154 |
0.8138 |
0.8178 |
0.8106 |
0.20% |
|
Apr 24, 2012 |
0.8138 |
0.8124 |
0.8159 |
0.8098 |
0.17% |
|
Apr 23, 2012 |
0.8124 |
0.8185 |
0.8185 |
0.8088 |
-0.76% |
Reserve Bank governor Alan Bollard has fired a shot across the bows of the foreign exchange market, warning that if the exchange rate remains strong, without anything else changing, he would need to reassess the outlook for monetary policy settings.Reserve Bank Governor Alan Bollard will keep the official cash rate at a record low 2.5%
The comment came in the release of the bank’s official cash rate review which, as universally expected, left it on hold at its all-time low of 2.5 per cent.
Six weeks ago he said that sustained strength in the New Zealand dollar would reduce the need for future increase in the OCR. That accompanied forecasts which penciled in hardly any increase in the OCR – just 25 basis points a year for the next three years.
Since then the kiwi dollar has not budged despite, as the governor points out today, recent falls in export commodity prices.
In New Zealand dollar terms those prices have fallen by 18 per cent over the past year – even before the latest Fonterra auction at which dairy prices dropped with a thud – but the exchange rate has shrugged it off.
This week brings investors a lot of data from NZ, which is all expected to be positive, and should help the kiwi continue to march upwards against the USD.
Major Economic Events for the past week actual v. forecast
|
Core Retail Sales (MoM) |
0.5% |
1.0% |
-0.8% |
|
|
USD |
New Home Sales |
328K |
320K |
353K |
|
GBP |
GDP (QoQ) |
-0.2% |
0.1% |
-0.3% |
|
GBP |
GDP (YoY) |
0.0% |
0.3% |
0.5% |
|
USD |
Core Durable Goods Orders (MoM) |
-1.1% |
0.5% |
1.9% |
|
USD |
Interest Rate Decision |
0.25% |
0.25% |
0.25% |
|
NZD |
Interest Rate Decision |
2.50% |
2.50% |
2.50% |
|
USD |
Initial Jobless Claims |
388K |
375K |
389K |
|
USD |
GDP (QoQ) |
2.2% |
2.5% |
3.0% |
Historical
Highest: 0.8816 USD on 31 Jul 2011.
Average: 0.7543 USD over this period.
Lowest: 0.6619 USD on 07 Jun 2010.
Economic Highlights of the coming week that affect the Yuan, Yen, Aussie and Kiwi
|
Apr 29 |
9:00pm |
NZD |
NBNZ Business Confidence |
33.8 |
|
|
Apr 30 |
9:00pm |
CNY |
Manufacturing PMI |
53.6 |
53.1 |
|
May 1 |
12:30am |
AUD |
Cash Rate |
4.00% |
4.25% |
|
12:30am |
AUD |
RBA Rate Statement |
|||
|
10:00am |
USD |
ISM Manufacturing PMI |
53.0 |
53.4 |
|
|
May 2 |
8:15am |
USD |
ADP Non-Farm Employment Change |
179K |
209K |
|
6:45pm |
NZD |
Employment Change q/q |
0.5% |
0.1% |
|
|
6:45pm |
NZD |
Unemployment Rate |
6.2% |
6.3% |
|
|
May 3 |
8:30am |
USD |
Unemployment Claims |
382K |
388K |
|
10:00am |
USD |
ISM Non-Manufacturing PMI |
55.5 |
56.0 |
|
|
9:30pm |
AUD |
RBA Monetary Policy Statement |
|||
|
May 4 |
8:30am |
USD |
Non-Farm Employment Change |
176K |
120K |
|
8:30am |
USD |
Unemployment Rate |
8.2% |
8.2% |
Upcoming Government Bond Auctions
Date Time Country
May 01 09:30 UK
May 02 09:10 Sweden
May 02 09:30 Portugal
May 02 13:00 US
May 03 08:30 Spain
May 03 08:50 France
May 03 09:10 Sweden
May 03 09:30 UK
May 08 09:15 Austria
May 08 09:30 Belgium
May 08 14:30 UK
May 08 15:30 Italy
May 08 17:00 US
May 09 09:10 Sweden
May 09 09:30 Germany
May 09 09:30 Swiss
May 09 09:30 UK
May 09 14:30 Sweden
May 09 15:30 Italy
May 09 17:00 US
May 10 15:00 US
May 10 17:00 US
May 11 09:10 Italy BOT auction
May 11 10:00 Belgium
Originally posted here
