NZD/USD Weekly Fundamental Analysis February 6-10, 2012, Forecast

By FX Empire.com

Economic Events: (GMT)

Feb. 06	CAD	Ivey PMI
NZD	Unemployment Rate
Feb. 07	AUD	Interest Rate Decision
AUD	RBA Rate Statement
Feb. 08	USD	FOMC Meeting Minutes
Feb. 09	GBP	Interest Rate Decision
EUR	Interest Rate Decision
USD	Initial Jobless Claims
EUR	ECB Press Conference
Feb. 10	CNY	Chinese CPI (YoY)
CAD	Trade Balance
USD	Trade Balance

Historical

Highest: 0.8816 USD on 31 Jul 2011.

Average: 0.7543 USD over this period.

Lowest: 0.6619 USD on 07 Jun 2010.

Rule:

NZD/USD: 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 predictablilty.

Analysis and Recommendation:

Analysis and Recommendation:
NZD/USD is trading at 0.8360 up after the weeks roller coaster ride on employment and manufacturing data. The USD surged mid day against most of its trading partners, to slowly settle down and drop as investors realized the would little call for Fed intervention.

The markets all week have been reacting only to news and economic reports. US jobs data and unemployment figures surprised the market this week, adding 243k jobs and unemployment dropping to 8.3%. Overall this was a strong week for the US and the greenback.

After reacting to the news and pushing the dollar up against all major currencies, the markets realized that this would reduce the need for Fed intervention, diminishing the chances of more QE or changes in monetary policy. Compounding this with more craziness is Greece, the USD gave back some of its gains.

Greece is still not resolved and the special meeting of the EU that was scheduled for Monday to review the Greek proposal has been cancelled.

There are several problems, which include Germany wanting to have more control over the Greek budget in the future, since it will be mostly German taxpayers who will be funding the bailout. Also the Greek politicians are not supportive of the addition austerity measures, facing elections in April; many political leaders are more concerned with re-election that demands from the EU and IMF.

The Greek Prime Minister said in a statement on Saturday, that the deal will be concluded by the end of the Sunday, satisfying politicians, creditors and the EU, ECB and IMF. The markets will await this new agreement.

The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.

Also on Friday report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.

On Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.

Strength:

1) US- Jan Payroll gains show big upside surprise of 243k, about 100k more than expected, unemployment rate falls to 8.3%

2) US- ISM services index rises to best since Feb ’11

3) US-ISM manufacturing up 1 pt but touch less than expected

4) US -Jan vehicle sales at 14.1mm is best since clunker month in Aug ’09 and the most since May ’08 before that

5) US – savings rate rises to 4% from 3.5%

6) US -Initial Jobless Claims fall 12k

7) Germany -unemployed fall again, rate at 6.7%

UK- manufacturing and services PMI figures both rise

9) Eurozone- manufacturing and services PMI in line with initial

10) Portuguese bond yields fall from highs, Italian yields lower too with Spain flat

11)China – manufacturing PMI stays above 50, Taiwan and South Korea rise but remain below 50

12) India – manufacturing and services PMI both jump

Weakness:

1) US- Jan Consumer Confidence falls almost 4 pts to 61.1, well below expectations of 68 as labor market answers soften and those that plan to buy a home falls to lowest since Aug and those that plan to buy a car down at lowest since Oct ’10

2) US -CS home price index falls to lowest since Feb ’03

3) US -MBA said refi’s fell 3.6% and purchase apps were down 1.7%

4) Canada – Jan jobs report disappoints

5) China – PMI services index falls to 52.9 from 56, the 2nd lowest since Feb ’11

6) Taiwan -economy in a recession after Q4 contraction q/o/q

7) Greek- debt discussions for another week are hours away from wrapping up, becoming a nightmare

Eurozone -Amount of LTRO funds from ECB continue to be redeposited with the ECB

Feb 07 09:00 Netherlands Eur 5.0bn Jul 2022 DSL

Feb 07 10:10 Greece 6M T-bill auction

Feb 07 10.30 UK Auctions 1.75% 2017 conventional Gilt

Feb 07 15:30 UK Details gilt auction on Feb 16

Feb 07 18:00 US Auctions 3Y Notes

Feb 08 10:10 Sweden Nominal bond auction

Feb 08 10:30 Germany Eur 4.0bn Feb 2017 Bobl

Feb 08 10:30 Swiss Bond auction

Feb 08 16:30 Italy Details BOT auction on Feb 13

Feb 08 18:00 US Auctions 10Y Notes

Feb 09 10:10 Sweden Sek 0.75bn I/L bond auction

Feb 09 15:30 Sweden Details I/L bond auction on Mar 23

Feb 09 16:00 US Announces auctions of 30Y TIPS on Feb 16

Feb 09 16:30 Italy Details BTP/CCTeu auction on Feb 14

Feb 09 18:00 Italy Auctions 30Y Bonds

Feb 10 11:00 Belgium OLO auction

Originally posted here