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

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Updated: Aug 28, 2015, 14:24 UTC

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.

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