NZD/USD Fundamental Analysis – August 17, 2015 – Forecast

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Published: Aug 14, 2015, 04:52 UTC

Analysis and Recommendation: The NZD/USD tumbled 32 points to trade at 0.6539 after a significant decline in retail sales. New Zealand retail sales

NZD/USD Fundamental Analysis – August 17, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD tumbled 32 points to trade at 0.6539 after a significant decline in retail sales. New Zealand retail sales growth came in well below expectations during the June quarter with a miniscule 0.1% increase recorded.

The figure, well below the downwardly-revised 2.3% increase of Q1, and forecasts for rise of 0.5%, marked the weakest quarter of growth since September quarter 2012. The figures strip out price movements during the quarter, essentially measuring sales volumes.

The data added to other signs the economy is losing pace as a slide in dairy prices, a rise in fuel prices, and a softening labour market has made consumers more cautious, backing the case for the Reserve Bank of New Zealand (RBNZ) cut to its cash rate (OCR) further.

“These data reinforce our expectation that the RBNZ cuts the OCR at least two more times this year,” said ASB Bank economist Kim Mundy.

The Reserve Bank of New Zealand has cut its cash rate in the two previous reviews to counter a crash in dairy prices, low inflation and a high exchange rate.

It is expected to cut by 25 basis points to 2.75 percent at the Sept 10 monetary statement, and once more in the fourth quarter.

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
NZD	Core Retail Sales (QoQ)	0.1%	0.7%	2.5%
NZD	Retail Sales (QoQ) (Q2)	0.1%	0.5%	2.3%
AUD	RBA Assist Gov Kent Speaks

Upcoming Economic Events that you should be monitoring:

Monday, August 17, 2015

Cur.	Event	Actual	Forecast	Previous
JPY	GDP (QoQ) (Q2)		-0.5%	1.0%
JPY	GDP (YoY) (Q2)		-1.9%	3.9%
EUR	Trade Balance (Jun)			18.8B
USD	NY Empire State Manufacturing Index		5.00	3.86
CAD	Foreign Securities Purchases (Jun)			-5.45B