NZD/USD Fundamental Analysis – August 25, 2015 -Forecast

Analysis and Recommendation:

The NZD/USD  took a major fall even as the US dollar tanked giving up 95 points to trade at 0.6591 as China weighs on the Asian markets.

The New Zealand dollar’s fortunes will probably be determined by changing views of US interest rates this week after softer-than-expected sentiment in the minutes of the US Federal Reserve’s last meeting prompted some investors to push out their expected timing for a rate hike.

The dollar index, which measures the greenback against a basket of currencies, touched its lowest in almost two months after last week’s release of the minutes to the Fed’s July meeting stoked speculation officials may refrain from raising interest rates in September.

 Investors concerned that weak equity markets and slowing growth in China may weigh on the Fed’s path to normalizing monetary conditions, could gain some confidence from Fed officials speaking this week and from an expected upward revision to US second quarter gross domestic product.

To bolster the Chinese economy, the People’s Bank of China is preparing to flood the banking system with liquidity to boost lending, the Wall Street Journal reported, citing officials and advisers to the central bank it didn’t identify. China is New Zealand’s largest trading partner.

Moves to strengthen the Chinese economy could provide some support to the kiwi currency, Weston said. However, he is betting the kiwi will end the week lower as traders gain more confidence about the US outlook.

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.

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Tuesday, August 25, 2015