NZD/USD Fundamental Analysis – August 13, 2015 – Forecast

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Published: Aug 12, 2015, 04:02 UTC

Analysis and Recommendation: The NZD/USD eased by 30 points to trade at 0.6505 as Chinese economic problems weigh heavily on the commodity currencies.

NZD/USD Fundamental Analysis – August 13, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD eased by 30 points to trade at 0.6505 as Chinese economic problems weigh heavily on the commodity currencies. Chinese growth is now slowing and the new exchange rate mechanism gives markets greater ability to push the yuan lower, just as the United States prepares to raise interest rates, a step that may add further to dollar strength. he devaluations sparked a rush in purchasing of the US dollar, driving the Australian currency down in “collateral damage”

“There is much talk about the prospect of further Yuan devaluation and loose talk of a possible resurrection of currency wars which is weighing in risk appetite,” OANDA Australia and Asia Pacific senior foreign exchange trader Stephen Innes said.

The further devaluation will have a further knock-on effect for the Australian dollar, which is very sensitive to fluctuations in commodity prices.

“Commodities were already trading of the back foot, but now with a weaker yuan it raises the prospects that we may see a drop in demand in commodities,” Mr Inness said.

ANZ Bank senior foreign exchange strategist Sam Tuck said the change came after weak economic data from the world’s second largest economy.

“devaluation is not positive news… and also the purchasing power of China is going down as the renminbi declines, so less money to spend on New Zealand and Australian exports,” he said.

China’s main lender manages the rate through the official midpoint, from which it can rise or fall 2 percent on any given day.

Until now, it had been determined solely by the central bank itself.

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 up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock	-0.847M	-1.800M	-2.400M
JPY	Monetary Policy Meeting Minutes
AUD	Westpac Consumer Sentiment (Aug)	7.8%		-3.2%
AUD	Wage Price Index (QoQ) (Q2)	0.6%	0.6%	0.5%
JPY	Industrial Production (MoM) (Jun)		0.8%	0.8%
JPY	Tertiary Industry Activity Index		0.1%	-0.7%
CNY	Fixed Asset Investment (YoY) (Jul)		11.5%	11.4%
CNY	Industrial Production (YoY) (Jul)		6.6%	6.8%

Upcoming Economic Events that you should be monitoring:

Friday, August 14, 2015

Cur.	Event	Actual	Forecast	Previous
NZD	Core Retail Sales (QoQ)		0.7%	2.9%
EUR	German GDP (QoQ) (Q2)		0.5%	0.3%
EUR	Core CPI (YoY) (Jul)		1.0%	1.0%
EUR	CPI (MoM) (Jul)		-0.6%	0.0%
EUR	GDP (QoQ) (Q2)		0.4%	0.4%
USD	PPI (MoM) (Jul)		0.1%	0.4%
CAD	Manufacturing Sales (MoM) (Jun)		2.1%	0.1%
USD	Industrial Production (MoM) (Jul)		0.3%	0.3%
USD	Michigan Consumer Sentiment (Aug)		93.5	93.1