NZD/USD Forecast Dec. 22, 2011, Fundamental Analysis

The NZD/USD pair advanced sharply on Wednesday, as the US dollar retreated against other major currencies which supported the Kiwi to record gains against the greenback.

Despite that the New Zealand current account deficit widened in the third quarter, the Kiwi was able to record gains against the dollar, the pair still moved higher on sentiment support yet choppy trading was evident after the ECB auction as the high amount allotted to bank in three-year loans frightened investors that the banking sector is under heavy pressure.

On Thursday at 21:45 GMT (Wednesday), the New Zealand economy will release the Gross Domestic Product for the third quarter, where the economy is projected to have expanded by 0.6% after 0.1% and on the year by 2.2% after 1.5%.

The U.S. economy will release the final GDP reading for the third quarter at 13:30 GMT, the annualized Gross Domestic Product for the third quarter is expected to remain unrevised at 2.0%.

The Personal Consumption for the third quarter is also expected steady at 2.3% as well as the Core Personal Consumption Expenditure to hold at 2.0%.

The U.S. economy will also issue its weekly initial claims, where the number of people filing for first-time claims for the state unemployment insurance dropped to 366 thousand last week.

At 14:55 GMT, the United States will issue the University of Michigan Confidence for December, where the previous reading was 67.7 and it’s expected to rise to 68.2.

The U.S. leading index for November will be released at 15:00 GMT and expected to slow to 0.3% from 0.9%.