NZD/USD Weekly Fundamental Analysis, October 20-24, 2014 Forecast

Weekly Analysis and Recommendation:

The NZD/USD continued to fall this week as the Reserve Bank seemed to be backing off its planned schedule of interest rate increases and on gong Chinese problems weighed on the currency. The kiwi is trading at 0.7917. Weak September consumer price data in China and Europe has stoked fears price growth may be slowing longer-term in a sluggish global economy, as low interest rates fail to stir economic activity. Chinese inflation slipped to 1.6 per cent in September from 2 per cent in August, well below the government’s target of 3.5 per cent, prompting calls for further monetary policy easing.

Worldwide, inflation is running below targets, with China’s slowdown, falling commodity prices and concerns about weakness in the global economy. The Reserve Bank of New Zealand will broaden the currency basket it uses to calculate the value of the kiwi dollar, to better reflect the nation’s trading relationships. Beginning December 11, the number of currencies in the benchmark trade-weighted index will increase to 17 from five, the RBNZ said in a statement on Friday. Economists have said the five-member TWI, which this year touched its highest since the New Zealand dollar was floated in 1985, had given a false sense of the strength of the currency and the conditions faced by exporters and importers.

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.

Historical: From 2011 to Present

Highest: 0.8842 USD on Aug 01, 2011

Average: 0.8131 USD over this period

Lowest: 0.7371 USD on Nov 25, 2011

 

Economic Highlights of the coming week:

Upcoming Government Bond Auctions

Date Time Country 

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Norway Bond auction

Oct 21 11:00 UK Auctions 2.75% 2024 Gilt

Oct 22 11:30 Germany Eur 2.0bn Aug 2046 Bund auction

Oct 23 11:03 Sweden I/L bond auction

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30 & 29

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29