NZD/USD Forecast Jan. 19, 2012, Fundamental Analysis

The NZD/USD pair traded near its highest level in two months, where the New Zealand dollar maintains its strong performance against greenback, pushing the pair to record more gains.

On the other hand, the Kiwi found strong support from the Chinese GDP figures which came better than expected, adding more signs that the strong demand from China will help the New Zealand economy to recover.

The U.S. dollar has lost ground against the Kiwi since the beginning of the week, as the cheerful data from the U.S. economy reduced demand for safe assets such as the greenback and the Japanese yen.

On Thursday at 21:45 GMT (Wednesday), New Zealand will release the Consumer Prices Index for the fourth quarter, where it’s expected to come at 0.4% in line with the previous quarter.

The annual Consumer Prices Index for the fourth quarter is expected to come at 2.6% from the prior reading of 4.6%.

At 00:00 GMT, the ANZ Consumer Confidence Index will be released, with a prior reading of 108.4.

On Thursday at 13:30 GMT, the U.S. economy will release the Consumer Price Index for December, where the prior reading was 0.0% and it’s expected to come at 0.1%. The annual CPI had a prior reading of 3.4% and expected to come at 3.1%.

The Housing Starts for December will be released also at 13:30 GMT, where the previous reading was up by 9.3% at 685 thousand, and expected to remain unchanged at 685 thousand. The U.S. Building Permits are expected with 0.7% drop to 675 thousand from the prior reading of 681 thousand.

The weekly initial claims are also due at the same time, where the number of people filing for first-time claims for the state unemployment insurance increased to 399 thousand last week.