NZD/USD Fundamental Forecast – September 1, 2016

The New Zealand Dollar finished higher on Wednesday, recovering from the previous day’s sharp sell-off. The NZD/USD closed at .7251, up 0.0033 or +0.46%.

Capping gains and pressuring the New Zealand Dollar this week has been a stronger U.S. Dollar. It is getting its support from increased bets the U.S. Federal Reserve is getting ready to raise interest rates this year. Traders have increased the odds of a September rate hike from 18% to 30%. The odds of a December rate hike have gone up from 50% to 60%. The increases are due to hawkish comments from Fed Chair Janet Yellen and Fed Vice Chair Stanley Fischer on Friday. Yellen said the economy was strengthening, but failed to support a September rate hike. Fischer said two rates hikes are “possible”.

The NZD/USD was pressured on Tuesday after the Conference Board said consumer confidence had soared to 101.1, its highest level in a year. Investors were looking for 97.2.

Earlier today, the ANZ bank’s survey for August showed a net 15.5 percent of companies were optimistic about the coming year, which was fractionally lower than July. But businesses were slightly more confident for themselves, with nearly 34 percent expecting an improvement, compared with 31.4 percent in July. The building and service sectors were the most confident, but agricultural based businesses trailed the survey although they were much less pessimistic.

Later on Wednesday, investors will get the opportunity to react to the latest data on private employment when ADP releases its Non-Farm Employment Change report. It is expected to show the private sector added 174K jobs to the economy. Chicago PMI is expected to show a reading of 54.1 and Pending Home Sales are expected to show a sizable increase from 0.2% to 0.7%.

Look for the NZD/USD to spike lower on Wednesday if the ADP report comes out stronger-than-expected. The New Zealand Dollar should move higher if the report misses the estimate to the downside.

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:

Upcoming Economic Events that you should be monitoring:

Thursday, September 1, 2016

Government Bond Auctions

Date/Time Country Type

Aug 31 11:05 Norway Holds bond auction

Aug 31 11:30 Germany Eur 4bn Sep 2018 Schatz

Sep 01 10:30 Spain Holds bond auction

Sep 01 11:30 UK Jul 2022 Gilt

Sep 01 11:50 France Holds bond auction