NZD/USD Weekly Fundamental Analysis, September 1-5, 2014 Forecast

The NZD/USD finished lower for the week after reaching its lowest level since late February. The selling pressure was generated by traders who still believe the currency is overvalued. This thought was put into the minds of traders after the Reserve Bank of New Zealand mentioned it in a monetary policy statement. This “verbal intervention” has taken the market from .8835 to .8301.

There are no major reports this week affecting the New Zealand Dollar so the U.S. data will steer the currency pair. Monday is a bank holiday in the U.S. so volume is expected to be light.

On Tuesday, September 2, the main focus will be on the U.S. ISM Manufacturing PMI and Construction Spending. Strong numbers will be supportive for the U.S. Dollar, however, gains may be limited because of low volume ahead of the U.S. jobs report on Friday.

Wednesday’s U.S. Factory Orders report should move the market. Traders are looking for an increase of 10.9%.

On Thursday, September 4, traders will get the opportunity to react to the latest jobs report estimates provided by the Challenger Jobs Cuts report and the ADP Non-Farm Employment report. The ADP report is expected to show an increase of 216K jobs. This report could rattle the markets if it misses the estimate.

Friday’s U.S. Non-Farm Payrolls report will be a market mover. Look for the NZD/USD to feel selling pressure if the report beats the estimate of 222K new jobs. A lower number should provide support for the 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. 

Economic events that traders should be aware of this coming week

Currency         Event                                                       Forecast                           Previous

Monday, September 1

NZD                   Overseas Trade Index                        -3.5%                                 1.8%

USD                  Bank Holiday

Tuesday, September 2

NZD                 ANZ Commodity Prices                                                                   -2.4%

USD                 Final Manufacturing PMI                    58.0                                    58.0

USD                 ISM Manufacturing PMI                      57.0                                     57.1

USD                 Construction Spending m/m              0.9%                                  -1.8%

USD                 IBD/TIPP Economic Optimism           46.2                                     44.5

USD                 ISM Manufacturing Prices                 59.0                                     59.5

Wednesday, September 3         

USD                 Factory Orders m/m                           10.9%                                 1.1%

USD                 Total Vehicle Sales                              16.5M                                16.5M

USD                 Beige Book         

Thursday, September 4

USD                Challenger Job Cuts y/y                                                                  24.4%

USD                ADP Non-Farm Employment             216K                                   218K

USD                Trade Balance                                     -42.5B                                -41.5B

USD                Unemployment Claims                      298K                                   298K

USD                Revised Non-Farm Prod.                   2.5%                                    2.5%

USD                Revised Unit Labor Costs                  0.6%                                    0.6%

USD                Final Services PMI                              58.5                                    58.5

USD                ISM Non-Manufacturing PMI           57.3                                    58.7

Friday, September 5

USD                Non-Farm Employment Change      222K                                   209K

USD                Unemployment Rate                          6.1%                                   6.2%

USD                Average Hourly Earnings m/m          0.2%                                   0.0%