NZD/USD Fundamental Analysis December 24, 2013 Forecast

Analysis and Recommendation:

The NZD/USD is trading Monday morning at 0.8194 easing by 6 points as volume turns light ahead of the holiday week. There was no data to support currency traders this morning and last week’s strong US data is a thing of the past after markets adjusted to the tapering announcement from the US Fed. The Fed’s announcement came ahead of local figures showed that New Zealand’s economic growth accelerated to a quarterly 1.4 percent in the September period on the strength of the dairy sector, stoking expectations the Reserve Bank will have to lift interest rates earlier than previously anticipated.

Traders are betting Governor Graeme Wheeler will lift the key rate 126 basis points over the coming 12 months from its 2.5 percent level, according to the Overnight Index Swap curve.

The optimism triggered by the US Federal Reserve’s decision to begin tapering its bond-buying program next month as the world’s biggest economic recovery gathers speed appears likely to extend into this Christmas-holiday shortened week. American GDP grew at a 4.1 percent annualized rate in the three months ended September, up from a previous estimate of 3.6 percent, and accelerating from 2.5 percent in the second quarter.

Investors now expect a gradual phasing out of the Fed’s bond-buying program though realise that tapering does not mean the end of central bank stimulus which has bolstered the rally in equities, with the Dow up 27 percent in 2013 and the S&P 500 gaining 30 percent.

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.  

Economic Data December 23, 2013 actual v. forecast

Japanese markets are closed today to celebrate the Emperors 80^th Birthday

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

 

Government Bond Auction

Date Time Country 

There are no major auctions scheduled for Christmas and New Year’s weeks.