NZD/USD Fundamental Analysis January 27, 2015 Forecast

Analysis and Recommendation:

The NZD/USD dipped 24 points against a rallying US dollar as data from China and comments by the Premier worry export economies. The strength of the US dollar which is now trading at highs not seen in decades weighs on the currency. The kiwi is trading at 0.7424 with the US dollar at 95.52. A regional holiday in Auckland and the absence of traders in Australia, which celebrated Australia Day, kept trading subdued and made it harder for the kiwi to break through key support levels.

New Zealand’s central bank is expected to keep its benchmark rate at 3.5 percent when it announces its decision on Thursday, although some economists expect the bank to remove its tightening bias. A US Federal Reserve policy meeting concludes shortly before the Reserve Bank’s statement is released. The kiwi didn’t move much after the BNZ Performance of Services Index rose 1.8 points to 56.5 in December from November on a scale where 50 divides expansion from contraction.

The kiwi and Aussie are also weaker as investors speculate that a slump in commodity prices, low inflation and a round of interest rate cuts by other central banks signal weak global demand, which could prompt the Reserve Banks of Australia and New Zealand to reduce interest rates.

New Zealand’s central bank is expected to keep its benchmark rate at 3.5 per cent when it announces its decision on Thursday, although some economists expect the bank to remove its tightening bias.

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 actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, January 27^h

Government Bond Auctions

Date Time      Country          Auction

Jan 26               Germany           Eur 1.5bn 12M (Jan 2016) Bubills

Jan 26               Italy                  Announces details of BTP/CCTeu on 29 Jan

Jan 27              Holland                         Eur 1-2bn 2.75% Jan 2047 DSL (re-opening)

Jan 27               Spain                3 & 9M T-bill auction

Jan 27               Italy                  Auctions CTZ/BTPei

Jan 27               US                    Auctions 2-yr FRN, plus 2-yr Notes

Jan 28               Sweden             Holds bond auction

Jan 28               Germany           Eur 2bn 2.5% Aug 2046 Bund

Jan 28               US                    Auctions 5-yr Notes

Jan 29               Italy                  Auctions BTPs/CCTeus

Jan 29               US                    Auctions 7-yr Notes