NZD/USD Weekly Forecast Jan. 02-06, 2012, Fundamental Analysis

The NZD/USD pair retreated from its highest level in three weeks, as the US dollar soared last week against other majors pushing the Kiwi down, on the other hand the New Zealand economy did not issue any fundamentals which reduced demand for the New Zealand dollar.

The risk aversion helped the greenback to overtake other majors, as demand increased for the dollar after the ECB announced that its balance sheet soared after it lent the financial institutions more money.

The ECB announcement increased bets in the market that the EU debt crisis still hurt the EU financial system, dragging the euro down to its lowest level in more than a year against the greenback before the end of 2011.

On the other hand, the Feds will release the FOMC minutes for December 13 meeting during the week, where the central bank will clear the reasons behind maintaining the monetary policy unchanged.

Expectations for the pair remain for further losses; since demand increased for the US dollar as a safe haven, on the other hand the New Zealand economy will not release any fundamentals during this week which will keep the pair’s movement depend on the dollar movements.

Major highlights for this week that will burden the NZD/USD pair’s trading:

Monday January 02:

On Monday, both economics will not issue any fundamental due to the New Year holiday, where low volume will dominate the pair’s movement.

Tuesday December 03:

On Tuesday at 15:00 GMT, the U.S. economy will release the Construction Spending for November, where the previous reading was 0.8% and it’s expected to come at 0.5%.

The ISM Manufacturing for December will be up at the same time, and it’s expected to come at 53.2 from the prior 52.7.

On the other hand, the Federal Reserve Bank of America will release the FOMC minutes for Dec. 13 meeting at 19:00 GMT, where the bank statement will affect the pair’s movements.

Wednesday December 04:

On Wednesday at 12:00 GMT, the American Factory Orders for November will be published, where the expectations refer to 2.0% from the previous drop of 0.4%. While the Total Vehicle Sales for December is expected to come at 13.50 million from the prior 13.59 million.

Thursday December 05:

The U.S. economy will release the ADP employment change for August at 13:15 GMT, where it’s expected to come at 165 thousands from the previous reading of 206 thousands.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 381 thousand last week.

On the other hand, the ISM Non-Manufacturing for December will be up at 15:00 GMT, where it had a previous reading of 52.0 and it is expected to come at 53.0.

Friday December 06:

The United States of America will issue a number of economic data on Friday, starting with the non-farm payrolls at 13:30 GMT, which is expected to show that the U.S. economy has added 150 thousand jobs during the month of December compared with the previous reading of 120 thousand jobs.

Unemployment rate during the month of December is expected to increase to 8.7% from the prior of 8.6%, while the yearly average hourly earnings index is expected to advance by 2.1% from the previous reading of1.8%.

Any improvement in new jobs in the United States could drive the dollar to raise more against the Japanese yen, as it reflect the strongest recovery in employment sector and the U.S. economy as whole.