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.

Free Trading Guides
EUR/USD
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
Mixed
USD/JPY
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
Gold
Bullish
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
Oil - US Crude
Bearish
Bitcoin
Mixed
More View more
Real Time News
  • Hey, traders 👋 do you want live AMAS with our analysts, market updates and tools to improve your trading strategy? Join us now on Instagram! 👉 https://t.co/pHGzVMqsC4 https://t.co/rjsOK2dHNF
  • LIVE NOW! Strategist @PaulRobinsonFX keeps you updated with the latest movements and trends during the London session for the FX and CFDs Market here - https://www.dailyfx.com/webinars/243785867?CHID=9&QPID=917720
  • Join @MartinSEssex 's #webinar at 6:30 AM ET/11:30 AM GMT to learn more about trading #sentiment Register here: https://t.co/XUUPRdY06p https://t.co/7ctEyTkZUU
  • LIVE IN 30 MIN: Strategist @PaulRobinsonFX keeps you updated with the latest movements and trends during the London session for the FX and CFDs Market here - https://www.dailyfx.com/webinars/243785867?CHID=9&QPID=917720
  • PBoC state that they will offer abundant liquidity after holidays through open market operations
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/10:30 AM GMT for insight on London #FX and #CFD trading. Register here: https://t.co/AoM3UvLtcF https://t.co/J6gdbuoij7
  • What are the Market cycles? How are #currencies impacted in these cycles? How can these cycles impact #forextrading patterns? Find out here: https://t.co/ckr2fUOWqW https://t.co/UbtbJog492
  • ICYMI: Japanese Government nominated Seiji Adachi to replace BoJ dovish dissenter Harada - Adachi also favours reflationary economic policy $JPY https://t.co/0coydAoDWJ
  • US 3-month and 10-year yield inverts for the first time since October 2019
  • Hang Seng during SARS outbreak, alongside previous virus outbreaks https://t.co/9gtJ0Xa2fN
New Zealand Dollar to Face Whipsaw Price Amid External Fears

New Zealand Dollar to Face Whipsaw Price Amid External Fears

2010-05-28 21:19:00
Michael Wright, Currency Analyst
Share:

TOF-10-05-28-NZD

 

Fundamental Forecast for Australian Dollar: Neutral

- New Zealand Posts First Annual Trade Surplus in Eight Years
- New Zealand Dollar Outlook Undermined by Downgraded Interest Rate Projects

The New Zealand dollar extended last week’s southern descent, ending the week slightly lower against the U.S. dollar and finishing as the fourth-worst major currency through Friday’s close. The economic docket in the high-yielding currency this past week was relatively light as the two year inflation expectation for the second quarter rose 2.8 percent from 2.7 percent the quarter prior. Meanwhile, trade surplus widened in April amid soaring commodity prices which kept exports near record levels, while imports of crude oil and machinery tumbled lower.

In the week ahead, NZD traders will turn their focus to business confidence, and the commodity price index. Thus, with a light economic calendar, the RBNZ rate decision on tap for June 9th, and the U.S. markets closed on Monday in observance of Memorial Day, we are likely to see whipsaw price action this coming week. Indeed, investors are pricing in a sixty six percent chance that policy makers will raise rates twenty five basis points at its next rate decision, according to the Credit Suisse Overnight Index swaps. At the same time, there is a slight possibility that we may see the central bank refrain from raising rates as the country is an external debater, making New Zealand defenseless against renewed fears of the European debt crisis.

On the other hand, though it seems unlikely in the short term, it is worth noting the possibility of an increase in Chinese interest rates in the medium term as local governments and banks have been the main factors hindering at a rise in rates. China is one of New Zealand’s key trading partners, and in turn, a rise in borrowing costs from the world’s second largest country will taper exports and growth in New Zealand. Nonetheless, the country’s largest vulnerability is now its large and growing net external liabilities which are expected to increase over the next five years as government debt soars from 14 percent to 21 percent this year. In regards to price action, we have seen a lackluster performance this week in the NZDUSD as the pair trades in the congested area of 0.6868 – 0.6618. Going forward, we may see the pair test 0.6500 for support, with price action likely to be capped around 0.7000 as the pair recently managed to break below the 200-day SMA. - MW

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

DISCLOSURES

News & Analysis at your fingertips.