NZD/USD Fundamental Forecast – February 12, 2016

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Published: Feb 11, 2016, 05:49 UTC

Analysis and Recommendation: The NZD/USD dipped 17 points as traders continued to shun commodity and commodity currencies sending the kiwi to trade at

Analysis and Recommendation:

The NZD/USD dipped 17 points as traders continued to shun commodity and commodity currencies sending the kiwi to trade at 0.6668. Janet Yellen’s testimony helped send the US dollar rebounding. NZ business confidence printing a bit higher than expected helping to limit declines. Fed chair Janet Yellen affirmed her expectation for “gradual increases” in the central bank’s key target interest rate but also noted downside risks including tighter US financial conditions, persistently low inflation, a higher US dollar, global markets turmoil and risks for Chinese growth and the Chinese yuan. Her tone surprised some in the market, and saw the greenback weaken against the yen, and spillover into currencies such as the kiwi.

“Yellen was a bit more dovish that the market expected,” said Michael Johnston, senior trader at HiFX. “We saw US dollar liquidation and buying of the yen which spilled over to the kiwi.” The moves were exacerbated by a bank holiday in Japan and Chinese New year, which reduced liquidity in the market, he said.

Traders will be anticipating the dairy auction next week, which “could see the luster of the kiwi come back off” and the weak greenback is a factor that will nudge it higher again.

The kiwi didn’t move much after a survey showed New Zealand manufacturing activity rose to a 15-month high in January, with an uptick in production and employment pointing to further improvements ahead, though not across all industries.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	Japan – National Founding Day
	China – Lunar New Year
NZD	Business NZ PMI (Jan)	57.9		56.7
GBP	RICS House Price Balance (Jan)	49%	52%	49%
EUR	Eurogroup Meetings
USD	Initial Jobless Claims		281K	285K
CAD	New Housing Price Index (MoM) (Dec)		0.2%	0.2%
USD	Fed Chair Yellen Testifies

Upcoming Economic Events that you should be monitoring:

Friday, February 12, 2016

Holiday China – Lunar New Year

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Governor Stevens Speaks
AUD	Home Loans (MoM) (Dec)		3.0%	1.8%
EUR	German CPI (MoM) (Jan)		-0.8%	-0.8%
EUR	German GDP (QoQ) (Q4)		0.3%	0.3%
EUR	German GDP (YoY) (Q4)		2.3%	1.8%
EUR	EU Finance Ministers Meeting
EUR	GDP (YoY) (Q4)		1.5%	1.6%
EUR	GDP (QoQ) (Q4)		0.3%	0.3%
EUR	Industrial Production (MoM) (Dec)		0.3%	-0.7%
USD	Core Retail Sales (MoM) (Jan)		0.1%	-0.1%
USD	Export Price Index (MoM) (Jan)		-0.9%	-1.1%
USD	Import Price Index (MoM) (Jan)		-1.4%	-1.2%
USD	Retail Sales (MoM) (Jan)		0.1%	-0.1%
USD	FOMC Member Kaplan Speaks
USD	Business Inventories (MoM) (Dec)		0.1%	-0.2%
USD	FOMC Member Dudley Speaks
USD	Michigan Consumer Expectations		82.0	82.7