NZD/USD Fundamental Analysis – August 20, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD  tumbled 23 points to trade at 0.6579 showing little response to better than expected PPI data.  Dairy product prices jumped in the latest GlobalDairyTrade auction, rising for the first time in nearly six months after Fonterra Cooperative Group cut back the volume of whole milk powder on offer by a third. The kiwi “had already priced in that strength in the GDT and so when it came in as expected, the kiwi was pretty happy to stay at the levels that it was, it was relatively unmoved by the auction which is a sign that it came in pretty much where markets were expecting it.”

The dollar reversed gains as traders turned their attentions to declining commodity prices along with problems brewing in China.  The US dollar gained on positive housing data.  “Housing market data releases are painting an encouraging picture. The National Association of Home Builders housing market index edged up to 61 in August from 60 the previous month. This took this indicator of homebuilder confidence to its highest level since November 2005.

The increase was driven by an improvement in current sales and prospective buyers in almost all regions of the country, except the Northeast region which had showed a solid print in the past two months. This supports our expectation for further improvement in the coming months.

Meanwhile, housing starts rose to a near eight-year high in July as builders ramped up construction. Housing starts increased 0.2 per cent, which is very impressive following the 12.3 per cent surge seen in June. Admittedly housing permits were much weaker (-16.3 per cent) though, but that came on the back of three months of strong increases.”

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:

 

Upcoming Economic Events that you should be monitoring:

Thursday August 20, 2015

Government Bond Auctions

Date Time Country

Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz

Aug 19 11:03 Sweden Holds bond auction

Aug 20 10:30 Spain Auctions Bonos/Obligaciones

Aug 20 11:30 UK Auctions 4.25% 2036 Gilt

Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug