NZD/USD Fundamental Analysis – August 21, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD gained 10 points to trade at 0.6612 as dairy prices rebounded the US dollar tanked.  he unexpectedly bearish minutes of the Federal Reserve’s July policy meeting sent the US dollar sinking Wednesday.

Markets took the tone of the record of the July 28-29 meeting as a sign that the central bank was less likely to begin hiking interest rates in its September meeting, though some analysts said that could still be in the cards.

The US dollar index, which measures the greenback against a basket of currencies, dropped after the release of the minutes, which cited concerns about weak wage inflation and oil prices.

Futures show traders pared back their expectations the Fed will raise rates at its September meeting to about a 38 percent chance, down from about 50 per cent earlier in the day, according to Bloomberg.

“There was no smoking gun for a September lift off in those minutes,” said Bank of New Zealand currency strategist Raiko Shareef.

“Almost all members” indicated that “they would need to see more evidence that economic growth was sufficiently strong and labor markets conditions had firmed enough for them to feel reasonably confident that inflation would return to the Committee’s longer-run objective over the medium term,” the minutes showed.

Hedge funds and other large speculators increased net long dollar positions to 437,635 contracts in the week ended Aug. 11, the highest level since the period ended Feb. 3, according to the latest data available from the Washington-based Commodity Futures Trading Commission.

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:

Friday, August 21, 2015

Government Bond Auctions

Date Time Country

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