NZD/USD Fundamental Analysis – November 12, 2015 – Forecast

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Published: Nov 11, 2015, 04:41 UTC

Analysis and Recommendation: The NZD/USD gained 50 points in the morning session to trade at 0.6581 after an address by RBNZ Governor Wheeler. The US

NZD/USD Fundamental Analysis – November 12, 2015 – Forecast

Analysis and Recommendation:

The NZD/USD gained 50 points in the morning session to trade at 0.6581 after an address by RBNZ Governor Wheeler. The US dollar also eased off its recent highs but remains very strong. The dollar edged down in Asia on Wednesday after rallying since last week’s US jobs data while Asian equities mostly dipped as investors nervously await their release of more Chinese economic data.

Another run of disappointing figures out of Beijing this week, on trade and inflation, has reinforced worries about China’s outlook. And Wednesday’s readings will be pored over for further clues about the world’s number two economy, a key driver of global growth.

The key focus for currency traders today will be a slew of data releases from China amid concern about the impact of slowing growth in Asia’s powerhouse. Chinese data published yesterday showed inflation cooled more than expected in October, advancing 1.3 percent from a year earlier, lower than the 1.6 percent pace in September and the 1.5 percent forecast in a Reuter’s poll. Traders will be looking to see if that trend is also evident in Chinese data due out today on October retail sales, industrial production and fixed asset investment.

Reserve Bank governor Graeme Wheeler says raising interest rates as a short-term monetary policy response to Auckland’s overheated housing market is “pretty negligible”.

Wheeler was appearing before parliament’s finance and expenditure committee after the release of the bank’s Financial Stability Report. In response to a question from National Party MP Andrew Bayly on the International Monetary Fund’s review saying a monetary policy response could be considered to help contain financial stability risks, Wheeler said a rate hike in the short term was not something the central bank saw as feasible.

“The possibility of us raising interest rates at this point to lean against house price pressures in Auckland are probably pretty negligible,” Wheeler said. “The last thing we would want to do is drive the exchange rate up for example.”

Auckland’s housing market has continued to accelerate in the face of regulatory curbs, increasing the risks facing bankers’ loan books, the report says.

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
NZD	RBNZ Gov Wheeler Speaks
USD	API Weekly Crude Oil Stock	6.300M	0.500M	2.800M
AUD	Westpac Consumer Sentiment	3.9%		4.2%
CNY	Fixed Asset Investment (YoY) (Oct)		10.2%	10.3%
CNY	Industrial Production (YoY) (Oct)		5.8%	5.7%

Upcoming Economic Events that you should be monitoring:

Thursday, November 12, 2015

Cur.	Event	Actual	Forecast	Previous
NZD	Business NZ PMI (Oct)			55.4
GBP	RICS House Price Balance (Oct)		45%	44%
AUD	Unemployment Rate (Oct)		6.2%	6.2%
EUR	German CPI (MoM) (Oct)		0.0%	0.0%
EUR	Industrial Production (MoM) (Sep)		-0.1%	-0.5%
USD	Initial Jobless Claims		270K	276K
USD	FOMC Member Bullard Speaks
USD	JOLTs Job Openings (Sep)		5.370M	5.370M
USD	Crude Oil Inventories		0.752M	2.847M
USD	FOMC Member Dudley Speaks
USD	Federal Budget Balance (Oct)		-130.0B	91.0B