NZD/USD Monthly Fundamental Forecast August 2015

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Published: Aug 1, 2015, 08:16 UTC

Outlook and Recommendation The NZD/USD drifted down on Friday to trade at 0.6591 as the month closed. NZD is entering August around its multi-year lows

NZD/USD Monthly Fundamental Forecast August 2015

Outlook and Recommendation

The NZD/USD drifted down on Friday to trade at 0.6591 as the month closed. NZD is entering August around its multi-year lows from mid-July. NZD has attempted stabilization from technically oversold levels, however remains vulnerable into year end. Sentiment is bearish with a near-record short $1.3bn CFTC position as of mid-July. Overall, broader risks remain biased to further downside in NZD.

A monetary easing bias remains in place in New Zealand. The Reserve Bank of New Zealand (RBNZ) reduced the benchmark overnight cash rate by 25 basis points (bps) in July following an equivalent cut in June, taking the key rate to 3.00%. Inflationary pressures remain weak, with the consumer price index rising by 0.3% y/y in the second quarter of 2015, well below the RBNZ’s 1-3% target range. Recent comments made by central bank Governor Wheeler indicate that monetary authorities will likely provide further stimulus to the economy, cutting the key rate by another 25 bps at the September 10th monetary policy meeting on the back of muted inflationary pressures and a preference for a weaker New Zealand dollar.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events In August That You Should Be Monitoring:

Time	Cur.		Event	Forecast	Previous
Saturday, August 1, 2015
05:00	CNY		Manufacturing PMI (Jul)	50.2	50.2
Monday, August 3, 2015
05:45	CNY		HSBC Manufacturing PMI (Jul)		48.2
11:55	EUR		German Manufacturing PMI (Jul)	51.5	51.5
12:30	GBP		Manufacturing PMI (Jul)	51.6	51.4
18:00	USD		ISM Manufacturing PMI (Jul)	53.5	53.5
Tuesday, August 4, 2015
05:30	AUD		Retail Sales (MoM) (Jun)	0.5%	0.3%
08:30	AUD		Interest Rate Decision (Aug)	2.00%	2.00%
12:30	GBP		Construction PMI (Jul)	58.4	58.1
Wednesday, August 5, 2015
02:45	NZD		Employment Change (QoQ) (Q2)	0.5%	0.7%
12:30	GBP		Services PMI (Jul)	58.0	58.5
16:15	USD		ADP Nonfarm Employment	215K	237K
18:00	USD		ISM Non-Manufacturing PMI	56.2	56.0
Thursday, August 6, 2015
05:30	AUD		Employment Change (Jul)	15.0K	7.3K
12:30	GBP		Manufacturing Production	0.2%	-0.6%
15:00	GBP		Interest Rate Decision (Aug)	0.50%	0.50%
Friday, August 7, 2015
16:30	USD		Nonfarm Payrolls (Jul)	222K	223K
18:00	CAD		Ivey PMI (Jul)	53.0	55.9
Saturday, August 8, 2015
06:00	CNY		Trade Balance (Jul)		46.54B
Sunday, August 9, 2015
06:00	CNY		CPI (YoY) (Jul)		1.4%
Tuesday, August 11, 2015
13:00	EUR		German ZEW Economic		29.7
Wednesday, August 12, 2015
09:30	CNY		Industrial Production (YoY) (Jul)		6.8%
12:30	GBP		Average Earnings Index +Bonus		3.2%
12:30	GBP		Claimant Count Change (Jul)		7.0K
Thursday, August 13, 2015
16:30	USD		Core Retail Sales (MoM) (Jul)	0.4%	-0.1%
Friday, August 14, 2015
10:00	EUR		German GDP (QoQ) (Q2)		0.3%
13:00	EUR		CPI (YoY) (Jul)		0.2%
16:30	USD		PPI (MoM) (Jul)	0.2%	0.4%
Tuesday, August 18, 2015
12:30	GBP		CPI (YoY) (Jul)
Thursday, August 20, 2015
12:30	GBP		Retail Sales (MoM) (Jul)		-0.2%
Friday, August 21, 2015
16:30	CAD		Core CPI (MoM) (Jul)
16:30	CAD		Core Retail Sales (MoM) (Jun)		0.9%
Monday, August 31, 2015
		Holiday	United Kingdom – Summer Bank Holiday