NZD/USD Fundamental Analysis October 3, 2014 Forecast

By:

Updated: Aug 24, 2015, 22:00 UTC

Analysis and Recommendation: The NZD/USD gained 48 points to trade at 0.7834 after the US dollar eased in the morning. Traders were watching the

NZD/USD Fundamental Analysis October 3, 2014 Forecast

Analysis and Recommendation:

The NZD/USD gained 48 points to trade at 0.7834 after the US dollar eased in the morning. Traders were watching the GlobalDairyTrade auction closely to gauge the impact falling dairy prices will have on the New Zealand economy. Dairy prices, the country’s largest export commodity, have slumped about 45 percent from a peak in February and continued to decline at the recent auction. The US-based auction will show whether prices found a base at the last auction two weeks ago, when the average wining price edged up from a two-year low. Investors will also be watching for whether the European Central Bank will announce further stimulatory measures to avoid the region sliding into deflation after inflation slowed to an annual 0.3 percent pace in September, from 0.4 percent the previous month.

The latest GlobalDairyTrade (GDT) result has disappointed Federated Farmers and now means farmers will be preparing for an austere 2014/15 season.

“There’s no way to dress this up as anything but a kick in the guts,” says Andrew Hoggard, Federated Farmers Dairy chairperson. “This is the auction result that brings the chickens roosting in the Eastern Ukraine home to us on-farm. Dislocated European Milk has definitely put a sinking lid on global dairy prices.

The ANZ Commodity Price Index slid 1.3 percent last month, a slower pace than August’s 3.3 percent drop, and is now 13 percent below February’s record high. Skim milk powder dropped 14 percent to its lowest level since June 2012, while butter prices declined 8 percent, whole milk powder fell 5 percent and cheese slipped 3 percent.

The survey comes after Fonterra Cooperative Group’s GlobalDairyTrade auction recorded the average winning price for dairy products at a five year low. The price of dairy, New Zealand’s largest export, has slumped nearly 50 percent from a peak in February amid increased supply as stocks build across the world due to Russia’s import ban and weak demand from China.

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
AUD	Building Approvals (MoM)	3.0%	1.0%	2.1%
AUD	Trade Balance (Aug)	-0.787B	-0.700B	-1.075B

Remember the ECB Press Conference on Thursday evening

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
GBP	Services PMI (Sep)		59.1	60.5
USD	Nonfarm Payrolls (Sep)		215K	142K
USD	Unemployment Rate		6.1%	6.1%
USD	ISM Non-Mfg. PMI		58.5	59.6