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NZD/USD Fundamental Analysis – August 31, 2015 – Forecast

Barry Norman

NZD/USD Fundamental Analysis – August 31, 2015 - Forecast
Analysis and Recommendation:

The NZD/USD was completely flat this morning as if traders were on holiday. Volume was very low and the pair held at 0.6472.

New Zealand’s credit ratings were affirmed by Standard & Poor’s, which expects the government to get its finances back into surplus, even if low inflation and slowing growth make that more difficult.

S&P kept the local currency long-term and short-term ratings for the country at AA+/A-1+, and affirmed the foreign currency long-term and short-term ratings at AA/A-1+, the ratings agency said in a statement. The agency also retained its stable outlook on New Zealand, reflecting its expectation the fiscal performance will continue to improve, even as external debt will remain high.

“New Zealand’s fiscal performance is gradually improving, following the negative impacts of the 2008 global recession and the 2010-2011 Canterbury earthquakes,” S&P said. “Our rating affirmation with a stable outlook is premised on our expectation that the central government will continue to improve budget performance over coming years. We see rising public sector savings as a necessary response to declining private sector savings.”

The sharp and sustained decline in dairy prices, New Zealand’s largest export commodity, will weigh on growth, and flow through to weaker spending in some sectors and regions. S&P expects the current account deficit to widen to nearly 6 percent of GDP in 2016, as the country’s falling terms of trade drag down the trade balance. A weaker kiwi dollar will help boost international competitiveness.

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

 

  JPY

 

Household Spending (YoY) (Jul)

-0.2%

1.3%

-2.0%

 

 

  JPY

 

Household Spending (MoM) (Jul)

0.6%

2.2%

-3.0%

 

 

  JPY

 

Jobs/applications ratio (Jul)

1.21

1.19

1.19

 

 

  JPY

 

National Core CPI (YoY) (Jul)

0.0%

-0.2%

0.1%

 

 

  JPY

 

Tokyo Core CPI (YoY) (Aug)

-0.1%

-0.2%

-0.1%

 

 

  JPY

 

Retail Sales (YoY) (Jul)

1.6%

1.1%

0.9%

   

 

Upcoming Economic Events that you should be monitoring:

Monday, August 31, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

United Kingdom – Summer Bank Holiday

  NZD

 

Building Consents (MoM) (Jul)

 

 

-4.1%

 

 

  JPY

 

Industrial Production (MoM) (Jul)

 

 

1.1%

 

 

  AUD

 

HIA New Home Sales (MoM) (Jul)

 

 

 

 

 

  AUD

 

Company Gross Operating Profits

 

 

0.2%

 

 

  AUD

 

Private Sector Credit (MoM) (Jul)

 

 

0.4%

 

 

  CHF

 

KOF Leading Indicators (Aug)

 

 

99.8

 

 

  EUR

 

CPI (YoY) (Aug)

 

0.2%

0.2%

 

 

  CAD

 

Current Account (Q2)

 

 

-17.5B

 

 

  USD

 

Chicago PMI (Aug)

 

54.5

54.7

   

Government Bond Auctions

Date Time Country

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep

 

 

 

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