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
Mixed
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
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • #DidYouKnow crude #oil is a natural resource that differs in composition depending on its location. Find out more crude oil facts from @WVenketas here: https://t.co/Ssp486xz2J #OOTT #CommoditieswithDailyFX https://t.co/zhkg96pyWo
  • RT @IHSMarkitPMI: 🇪🇺 Eurozone endured its worst quarter since 2013, according to flash PMI data, with December coming in at 50.6 (unchanged…
  • Tune in to @CVecchioFX 's #webinar at 7:30 AM ET/12:30 PM GMT to prepare for major event risk in the week ahead. Register here: https://t.co/QscMCDP1ud https://t.co/TZfPbJO4np
  • RT @lisaabramowicz1: Sweden is in the spotlight of global monetary policy as counterparts watch to see how easy it is for the experiment of…
  • RT @elerianm: Good morning. Wishing you all a good week Mixed real economy data to start the week: A beat in #China for retail sales (+8% Y…
  • The inside bar pattern occurs regularly within the financial markets. Incorporating the inside bar strategy within a trading system can enhance a trader’s market analysis technique. Find out how you can use it from @WVenketas here: https://t.co/E3EWOYTYNw https://t.co/zXiuoUw0ar
  • RT @elerianm: This @FT story--on "US #retailers hit by ‘worst year since 2008’ for discounting"--could be read as the third partial indicat…
  • RT @Schuldensuehner: Just to put things into perspective. S&P500’s all-time high driven mainly by global liquidity which hit an all-time hi…
  • RT @KyleR_IG: * CHINA NOV. RETAIL SALES RISE 8% Y/Y; EST. 7.6% * CHINA NOV. INDUSTRIAL OUTPUT RISES 6.2% y/y; EST. 5% * CHINA JAN-NOV FIXED…
  • Gold Price: XAU/USD Key Chart Signals to end Consolidation- GLD Forecast More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/xau-usd/2019/12/16/Gold-Price-XAUUSD-Key-Signals-to-end-Consolidation--GLD-Forecast-MK.html?CHID=9&QPID=917714 https://t.co/WUxDroWEBk
Kiwi Gains After Dovish Fed, But Shift in Stance from RBNZ Doubtful

Kiwi Gains After Dovish Fed, But Shift in Stance from RBNZ Doubtful

2017-03-18 21:50:00
Oliver Morrison, Analyst
Share:
Kiwi Gains After Dovish Fed, But Shift in Stance from RBNZ Doubtful

Fundamental Forecast for NZD/USD: Bearish

- NZD/USD gains were driven primarily by the FOMC, not positive data from New Zealand.

- Recent data from New Zealand has actually been disappointing – GDP especially.

- GDP print means RBNZ is unlikely to alter its accommodative stance on rates at its meeting on March 23.

The New Zealand Dollar gained on the US Dollar this week as markets evinced disappointment that the US Federal Reserve wasn’t more hawkish on interest rates after raising them on Wednesday. However, the Kiwi has given back some of those gains since, with softer economic data hammering home the dovish message from the Reserve Bank of New Zealand, which held the official cash rate steady at record lows of 1.75% at its February policy meeting, and suggested that it could remain there for two years or more. The RBNZ Governor added that the currency ought to be lower than current market pricing.

Earlier this week, the Kiwi fell against its major counterparts after fourth quarter GDP data missed expectations. New Zealand’s economy grew 2.7% y/y versus 3.2% expected and 3.3% in the third quarter (revised lower from 3.5%). The nation’s output increased by 0.4% q/q versus 0.7% expected and 0.8% prior (also revised lower from 1.1%). This marked the slowest pace of quarterly expansion since July 2015. Front end New Zealand government bond yields fell simultaneously with the data’s release.

Data were mixed on Friday, with the March consumer confidence index from lender ANZ and research firm Roy Morgan slipping 1.7% on the month to 125.2. This came after news that New Zealand’s manufacturing sector expanded strongly in February. The Performance of Manufacturing Index came in at 55.2 for the month, well above January’s revised 52.2. This series is analogous to the Purchasing Managers Indexes (PMIs) released globally. Any reading above the 50 line signifies sectoral expansion. The index is now at its highest level since last September and January’s PMI dip now looks largely seasonal in nature.

Next week’s docket is sparse, apart from the RBNZ rate decision on Wednesday. The New Zealand Consumer Sentiment Index will be released Sunday, followed by Dairy Auction Prices on Tuesday, and Trade Balance figures on Thursday. None of these data should hold too much influence with the RBNZ decision on tap.

At the March 23 policy meeting, the RBNZ is once again expected to maintain the official cash rate at 1.75%, and continue to push a neutral if not dovish bias. At the previous RBNZ decision, Governor Wheeler made clear the intention to keep rates at their present level for the entirety of 2017, dispensing any rate hike expectations markets had priced in for this year. Likewise, given his complaints that the Kiwi was overvalued and that global risks remain – a clear reference to the rise of protectionism, led by the United States and the United Kingdom – there seems little reason to believe that, with recent GDP data having disappointed, the RBNZ will upgrade its tone. –OM

Want trade ideas? Check out the DailyFX Trading Guides

--- Written by Oliver Morrison, Market Analyst

To contact Oliver, email him at oliver.morrison@ig.com

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

DISCLOSURES

News & Analysis at your fingertips.