NZD/USD Fundamental Analysis November 3, 2014 Forecast

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Updated: Aug 25, 2015, 07:00 UTC

Analysis and Recommendation: The NZD/USD reversed gains from late on Thursday to trade at 0.7830 down by 15 points in the morning session. The Federal

NZD/USD Fundamental Analysis November 3, 2014 Forecast

Analysis and Recommendation:

The NZD/USD reversed gains from late on Thursday to trade at 0.7830 down by 15 points in the morning session. The Federal Open Market Committee dismissed recent turmoil in global markets as it focused instead on “solid” U.S. employment gains. It said the labor market has strengthened enough to withstand an end to its quantitative-easing program and downplayed risks posed by slowing inflation.

RBNZ Governor Wheeler reiterated the kiwi’s level “remains unjustified and unsustainable and continues to constrain growth in the tradable sector.” The currency earlier extended declines as he omitted a comment from his prior statement that the central bank expected some further tightening would be necessary to contain future inflation.

New Zealand building consents fell at the fastest monthly pace in more than two years in September amid uncertainty around that month’s general election.

New Zealand consumer confidence edged up three index points in the third quarter to a score of 102. The increase of three points from the previous quarter and five points from a year ago (Q3 2013) shows slow and steady progress for the country. The index – which reached its lowest score of 89 in Q2 2009 – is currently 13 points shy of New Zealand’s pre-recession level (115).

The year-on-year increase was driven by the belief of the majority of Kiwis (56%) that the job market would be good or excellent over the next year, an 11 percentage-point increase from Q3 2013. Over the same time period, there were also improvements in respondents rating their personal finances for the upcoming year as good or excellent (up four percentage-points to 61%) and whether it would be a good time to buy things over the next 12 months (up three percentage-points to 42%).

The kiwi may have gained more against the greenback because it dropped the most yesterday following a more upbeat statement about the prospects for the US economy and as economists pulled back their expectations for interest rate rises here after the Reserve Bank removed a sentence in its policy statement referring to the need for further interest rate rises.

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:

Cur.	Event	Actual	Forecast	Previous
JPY	Household Spending	-5.6%	-4.3%	-4.7%
JPY	Household Spending	1.5%	1.9%	-0.3%
JPY	National Core CPI (YoY)	3.0%	3.0%	3.1%
JPY	Tokyo Core CPI (YoY)	2.5%	2.5%	2.6%
AUD	PPI (YoY) (Q3)	1.2%	2.6%	2.3%
AUD	PPI (QoQ) (Q3)	0.2%	0.2%	-0.1%
AUD	Private Sector Credit	0.5%	0.4%	0.4%
JPY	BoJ Press Conference

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
AUD	AIG Manufacturing			46.5
AUD	Building Approvals			3.0%
CNY	Non-Manufacturing PMI			54.0
CNY	HSBC Mfg. PMI			50.4
EUR	Spanish Manufacturing			52.6
EUR	Italian Manufacturing		50.7	50.7
EUR	French Manufacturing		47.3	47.3
EUR	German Manufacturing		51.8	51.8
EUR	Manufacturing PMI		50.7	50.7
GBP	Manufacturing PMI			51.6
USD	ISM Employment		55.0	54.6
USD	ISM Manufacturing PMI		56.7	56.6