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NZD/USD Fundamental Forecast – February 9, 2016

By:
Barry Norman

Analysis and Recommendation: The NZD/USD added 13 points with the local markets closed for a domestic holiday. The kiwi is trading at 0.6638 after China

NZD/USD Fundamental Forecast – February 9, 2016

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Analysis and Recommendation:

The NZD/USD added 13 points with the local markets closed for a domestic holiday. The kiwi is trading at 0.6638 after China pumped in additional stimulus on Saturday helping its trading partners to gain.  The New Zealand dollar (NZD) was the strongest currency this week as the domestic unemployment rate in the last quarter of 2015 plunged from 6% to 5.3% and employment grew 0.9% after falling 0.5% in the previous quarter.

The news was enough to dislodge pessimism instilled by a negative diary auction, conducted hours earlier, in which it was shown prices for the country’s key export fell a whopping 7.4%.

Currency markets took cheer from the employment data and bid the NZ dollar to US dollar conversion from 0.6488 at the start of the week to the mid-week close of 0.6665.

Traders are keeping their eyes on the horizon and ask whether the employment data is enough to convince the all-important decision makers at the Reserve Bank of New Zealand (RBNZ) that there is no need to cut interest rates further.

Lower interest rates mean lower yields on New Zealand bonds which would spark an outflow of foreign capital from the country, driving the NZD lower.

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  
    China – Lunar New Year
    New Zealand – Waitangi
  JPY Adjusted Current Account  1.64T   1.42T  
  JPY Current Account n.s.a. (Dec)  0.96T 0.987T 1.144T

 

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Upcoming Economic Events that you should be monitoring:

Tuesday, February 9, 2016

Cur. Event Actual Forecast Previous  
  China – Lunar New Year
  AUD HIA New Home Sales (MoM) (Dec)     -2.7%  
  GBP BRC Retail Sales Monitor (YoY) (Jan)   0.4% 0.1%  
  AUD NAB Business Confidence (Jan)     3  
  EUR German Industrial Production (MoM)   0.4% -0.3%  
  EUR German Trade Balance (Dec)   20.2B 19.7B  
  GBP Trade Balance (Dec)   -10.35B -10.64B  
  GBP Trade Balance Non-EU (Dec)   -2.55B -2.45B  
  USD JOLTs Job Openings (Dec)   5.400M 5.431M

Government Bond Auctions

Date Time and Country

Feb 08 16:20 Italy Details of bond auction

Feb 09 11:00 Netherlands Holds DSL auction

Feb 09 11:00 Austria Holds bond auction

Feb 09 11:30 Germany Holds I/L bond auction

Feb 09 11:30 UK 0.125% 2026 Gilt linker auction

Feb 09 n/a UK Details of Gilt auction on Feb 17

Feb 09 19:00 US Holds 3-year note auction

Feb 10 11:30 Germany Euro 5bn Mar 2018 Schatz

Feb 10 17:20 Sweden Details of bond auction on Feb 17

Feb 10 19:00 US Holds 10-year note auction

Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction

Feb 11 11:03 Sweden Holds I/L bond auction

Feb 11 11:10 Italy Announces details of bond auction

Feb 11 11:30 UK 3.5% 2045 Gilt auction

Feb 11 19:00 US Holds 30-year bond auction

Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18

Feb 12 11:10 France Details of bond auction on 18 Feb

 

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