NZD/USD Fundamental Analysis, March 11, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD continued to fall as the US dollar rose to record highs in the Asian session. Chinese data was mixed with PPI missing expectations, while consumer inflation printed better than forecast. Traders are focused on the upcoming central bank meeting this week. The dollar rose to an eight-year high on Tuesday as the U.S. currency found steady bids on the back of expectations that the Federal Reserve may begin raising interest rates as early as summer.

Chinese inflation data released just a few hours ago showed that the consumer price index (CPI) rose 1.4 percent on year, beating expectations of a 0.9 percent rise predicted in a Reuters poll and following a 0.8 percent climb in January. But wholesale prices stayed entrenched in deflation, falling 4.8 percent in February, compared to forecasts of a 4.3 percent fall, and after the 4.3 percent drop in January.

The latest Manpower Employment Outlook Survey, released today, shows New Zealand employers expect hiring activity in Q2 2015 to be slower than Q1, but still steady.

The New Zealand dollar fell to a new low as traders questioned whether the Reserve Bank’s steps to lean on lending to speculative property investors will warrant a harder stance when the bank reviews interest rates on Thursday. Economists are almost unanimous in the view that RBNZ governor Graeme Wheeler will leave the official cash rate unchanged at 3.5 percent at Thursday’s review, but there is a growing expectation priced into bond markets that the RBNZ may end up cutting rates before it next raises them.

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:

Wednesday, March 11, 2015

Government Bond Auctions

Date Time Country

Mar 11 11:03 Sweden Sek 2bn 2.5% Jun 2022 & Sek 2bn 2.5% May 2025 bonds

Mar 11 11:10 Greece Eur 1bn 3 month (Jun 2015) T-bills

Mar 11 11:15 Norway Holds bond auction

Mar 11 11:30 Germany Eur 5bn 0% Mar 2017 Schatz

Mar 11 19:00 US Usd 21bn 10-yr Notes

Mar 12 10:30 Spain Auctions 1.4% Jan 2020 Bono, plus 5.85% Jan 2022 & 1.60%

Mar 12 11:00 Ireland Eur 1bn 2% 30 year (Feb 2045) bond

Mar 12 11:10 Italy Auctions BTPs/CCTeus

Mar 12 11:30 UK Auctions I/L conventional Gilt

Mar 12 17:00 US Announces 10-yr TIPS auction on Mar 19

Mar 12 19:00 US Usd 13bn 30-yr Bonds

Mar 18 11:30 Germany Eur 4bn Feb 2025 Bund

Mar 18 16:30 Sweden Details bond sale on 25 Mar

Mar 19 11:10 France Auctions BTANs

Mar 19 12:10 France Auctions OATi

Mar 19 11:10 Sweden Holds inflation-linked bond auction

Mar 19 11:30 UK Auctions conventional Gilt

Mar 19 17:00 US Announces 2-yr FRN, plus 2/5/7 yr Notes

Mar 19 19:00 US Auctions 10-yr TIPS