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Barry Norman
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NZD/USD Fundamental Analysis October 14, 2014 Forecast
Analysis and Recommendation:

The NZD/USD soared 47 points after Chinese data printed in the green, with imports into China soaring helping to support the kiwi which is dependent on exports into China.  Investors are turning away from higher risk currencies such as the kiwi and Aussie on concern about the outlook for the global economy following weakness in Europe, Japan and China. Global growth concerns have strengthened currencies such as the yen while weighing on commodities and stock markets.

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“It’s a risk aversion play, the yen tends to outperform in bouts of risk aversion where investors are nervous and kiwi being one of those currencies that’s linked to global growth tends to perform poorly, so that’s the classic response that we’ve seen in currency markets,” said Bank of New Zealand currency strategist Raiko Shareef. “Because they have this asymmetric response to investor nervousness, that cross tends to hurt the most when it comes to these sorts of episodes.

 There was not a large amount of domestic or global financial data due this week so attention would be on stock market performance. Speizer said the New Zealand dollar could fall below US77c within the next few weeks and would probably struggle against the yen due to its perceived safe-haven status.

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

 

 

Holiday

Japan – Health-Sports Day

 

 

Holiday

Canada – Thanksgiving Day

 

  CNY

 

Exports (YoY) (Sep)

15.3%

11.8%

9.4%

 

 

  CNY

 

Imports (YoY) (Sep)

7.0%

-2.7%

-2.4%

 

 

  CNY

 

Trade Balance (Sep)

31.00B

41.00B

49.83B

 

 

Upcoming Economic Events that you should be monitoring:

 

Cur.

Event

Actual

Forecast

Previous

 

  AUD

RBA Asst Gov. Debelle

 

 

 

 

 

  CNY

New Loans

 

750B

703B

 

 

  EUR

French CPI

 

-0.3%

0.4%

 

 

  EUR

French HICP

 

-0.3%

0.5%

 

 

  EUR

Spanish CPI

 

0.2%

0.2%

 

 

  GBP

CPI (MoM) (Sep)

 

0.2%

0.4%

 

 

  GBP

CPI (YoY) (Sep)

 

1.4%

1.5%

 

 

  GBP

PPI Input (MoM) (Sep)

 

-0.4%

-0.6%

 

 

  EUR

Italian CPI (MoM) (Sep)

 

-0.3%

-0.3%

 

 

  EUR

Industrial Production

 

-1.6%

1.0%

 

Government Bond Auction

Date Time Country Auction

Oct 14 08:30 Spain 6 & 12M T-bill auction

Oct 14 09:30 Belgium 3 & 12M T-bill auction (Jan & Oct 2015)

Oct 15 09:03 Sweden Bond auction

Oct 15 09:30 Germany Eur 4.0bn Sep 2016 Schatz auction

Oct 16 08:30 Spain Bono/Obligacion auction

Oct 16 09:30 UK Auctions 0.125% 2024 I/L Gilt

Oct 16 15:00 US Announces details of 30Y TIPS auction on Oct 23

 

 

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