NZD/USD Fundamental Forecast – September 6, 2016

The NZD/USD soared as the greenback weakened and positive Chinese data helped the markets breathe a sigh of relief. The US dollar fell 14 points to 95.73 after a lackluster jobs report on Friday. The kiwi is up 37 points at 0.7328. China’s August Caixin services purchasing managers’ index rose to 52.1 on a seasonally-adjusted basis, from 51.7 in the previous month. A reading above 50 indicates an expansion of the services sector, while a reading below 50 indicates contraction.

Comments from China at the G20 helped support its major trading partners including Australia and New Zealand. China’s rapidly increasing non-financial outbound direct investment (ODI) will jump at least 20% in the second half of 2016 from a year earlier, a top government think tank said in a research report published by a newspaper on Monday. Buoyed by an abundance of foreign exchange reserves and decreasing opportunities at home due to a sharp slowdown in the world’s second-largest economy, China’s ODI surged 58.7% year-on-year to $88.86 billion in the first half.

China’s foreign exchange reserves, the world’s biggest, stand at around $3.2 trillion.

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Upcoming Economic Events that you should be monitoring:

 September 6, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction