News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • OPEC technical meeting was told to expect US oil output to rise by 200kbpd this year - OPEC & Industry sources
  • 🇨🇦 New Housing Price Index YoY (MAY) Actual: 11.3% Previous: 9.9% https://www.dailyfx.com/economic-calendar#2021-06-18
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 82.84%, while traders in France 40 are at opposite extremes with 76.19%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/zkLXaQqTXf
  • Fed's Bullard says his dot plot reflects liftoff in late 2022
  • $USDCAD taking on a new life now, back above the longer-term trendline +370 from the failed breakout earlier this month https://t.co/2oP2ky434R https://t.co/BhnSTJFv2m
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/7nP2tv6q9a
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.03% 🇪🇺EUR: -0.07% 🇨🇦CAD: -0.13% 🇬🇧GBP: -0.41% 🇦🇺AUD: -0.49% 🇳🇿NZD: -0.54% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ChEmo0URYP
  • Heads Up:🇨🇦 New Housing Price Index YoY (MAY) due at 12:30 GMT (15min) Previous: 9.9% https://www.dailyfx.com/economic-calendar#2021-06-18
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/v6m2DLdhHa
  • Heads Up:🇮🇳 Monetary Policy Meeting Minutes due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-06-18
New Zealand Dollar Struggles For  Fudamental Support

New Zealand Dollar Struggles For Fudamental Support

David Cottle, Analyst

New DailyFX Quarterly Forecasts for Q4 are available here

The New Zealand Dollar is down to lows not seen since early 2016 against its US big brother, and has shed nearly 10% this year so far. However, the kiwi’s punishment beating could be far from over yet.

Of course, it’s no great news that interest rate differentials support the US Dollar against it. They do against all major traded currencies and look set to continue to do so for some time. As the Federal Funds Target Rate just keeps rising, New Zealand’s roughly equivalent Official Cash Rate languishes at its 1.75% record low. It is not expected to move this year and, indeed, until well into next. However, the global growth cycle would be extremely mature by then, and any medium term changes are subject to innumerable variables. Upshot: a rise is not set in stone.

There are one or two other uncomfortable fundamental factors for kiwi bulls. Firstly it seems that the nation’s key diary trade remains oversupplied. Fonterra is the co-operative that manages a lot of the sector and it downgraded its milk-price forecast earlier this month. Then there is China. Amid mounting evidence that its economic expansion is slowing, New Zealand’s huge agricultural trade with the world’s second largest economy could come under further pressure too.

Given all of the above, it’s perhaps not surprising that the most recent Commitment Of Traders data from the US Commodity Futures Trading Commission showed record levels of short positions against the New Zealand Dollar. This very fact may offer some scope for a modest near-term rebound, but records are there to be broken and the fundamentals suggest that NZD/USD can go lower year, and it probably will.

As for how much lower, well, a look at the pair’s monthly chart finds it already threatening the base of a range that had previously limited downside since the summer of 2015. Should that give way in the months ahead then the long climb up from the post crisis lows of 2008 will be under threat.

New Zealand Dollar Struggles For  Fudamental Support

For as long as US monetary policy is tightening then that giving way looks all but certain. Much of this logic can also be applied to shorting the Australian Dollar, but the Aussie economy is more diverse than New Zealand’s and, while things don’t look great for its currency, shorting the Kiwi may well make more sense.

Resources for Traders

--- Written by David Cottle, DailyFX Research

Follow David on Twitter @DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES