The NZD/USD closed the week at 0.6918 near the top of its trading range seeing a gain of 1.66% for the week as the US dollar remained weak against its
The NZD/USD closed the week at 0.6918 near the top of its trading range seeing a gain of 1.66% for the week as the US dollar remained weak against its crosses. Scoop New Zealand reported this week that Chinese economic growth slowed from 6.8 percent in the fourth quarter of last year but fixed-asset investment rose 10.7 percent, beating estimates. China is New Zealand’s biggest trading partner and the world’s second-largest economy and its health typically benefits growth-linked currencies such as the kiwi. But the gains are capped because a healthy global economy also increases the prospects that the Federal Reserve will hike interest rates, which would benefit the greenback.
“What’s really happened with the Chinese data is that it has confirmed what we’ve seen in the last month or so that the global situation has been steadily improving,” said Sam Tuck, senior foreign exchange strategist at ANZ Bank New Zealand. “That’s lifted the kiwi over the last month or so as the US (Fed) has stayed dovish. But a better global economy should free up the Fed and allow the US dollar to strengthen.”
Traders are now focused on the release next Monday of the consumer’s price index for the first quarter, which the Reserve Bank has forecast to show a 0.2 percent quarterly for an annual increase of 0.4 percent. That keeps the annual rate below the central bank’s 1 percent to 3 percent target band, which the bank doesn’t expect to reach until the final quarter of 2016. Market expectations are for just a 0.1 percent increase in the first quarter.
The kiwi didn’t move much after the release of the BNZ-BusinessNZ performance of manufacturing index, which fell to a seasonally adjusted 54.7 last month, a five-month low. Traders are relatively evenly split on the timing of an interest rate cut by the Reserve Bank, with about 49.7 percent seeing a cut in the official cash rate to 2 percent on April 28 and 50.3 percent seeing the rate remaining at 2.25 percent, making a cut in June more likely, based on the overnight interest swap curve.
FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week:
Cur. | Event | Actual | Forecast | Previous | ||||
Monday, April 18, 2016 | ||||||||
NZD | CPI (QoQ) (Q1) | 0.1% | -0.5% | |||||
Tuesday, April 19, 2016 | ||||||||
EUR | German ZEW Economic Sentiment (Apr) | 8.0 | 4.3 | |||||
USD | Building Permits (Mar) | 1.200M | 1.177M | |||||
Wednesday, April 20, 2016 | ||||||||
GBP | Average Earnings Index +Bonus (Feb) | 2.3% | 2.1% | |||||
GBP | Claimant Count Change (Mar) | -10.0K | -18.0K | |||||
USD | Existing Home Sales (Mar) | 5.29M | 5.08M | |||||
USD | Crude Oil Inventories | 6.634M | ||||||
Thursday, April 21, 2016 | ||||||||
GBP | Retail Sales (MoM) (Mar) | -0.2% | -0.4% | |||||
EUR | Interest Rate Decision (Apr) | |||||||
USD | Philadelphia Fed Manufacturing Index | 8.0 | 12.4 | |||||
Friday, April 22, 2016 | ||||||||
EUR | German Manufacturing PMI (Apr) | 51.0 | 50.7 | |||||
CAD | Core CPI (MoM) (Mar) | 0.3% | 0.5% | |||||
CAD | Core Retail Sales (MoM) (Feb) | -0.5% | 1.2% |
Government Bond Auctions
Date Time Country Auction
Apr 18 11:00 Belgium Holds OLO auction
Apr 18 13:00 Norway Details of bond auction on Apr 20
Apr 20 11:05 Norway Holds bond auction
Apr 20 11:30 Germany Eur 4bn 0.5% Feb 2026 Bund
Apr 20 17:20 Italy Details of BTP€i auction
Apr 20 17:20 Sweden Details of bond auction on Apr 27
Apr 21 10:30 Spain Holds bond auction
Apr 21 11:03 Sweden Holds I/L bond auction
Apr 21 11:50 France Holds bond auction
Apr 21 19:00 US Holds 5-year TIPS auction
Apr 22 17:20 Italy Announces details bond auction