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NZD/USD Fundamental Analysis, May 13, 2015 – Forecast

Analysis and Recommendation (NZD/USD Forecast 2015): 

The NZD/USD added 17 points after tumbling steadily on Monday after the Chinese central bank surprised markets with a 25bps reduction. The kiwi is trading at 0.7352. Interest rate expectations have changed considerably over the last quarter with a net 11% of respondents expecting higher interest rates over the year ahead – sharply down from 34% last quarter and 70% a year ago.

The expectation echoes ASB’s move last week to forecast the Reserve Bank will cut the OCR later this year, putting a 60% probability on any cuts occurring.

The kiwi slid as expectations grew that weak inflation, an elevated local currency and falling dairy prices would prompt the Reserve Bank to start cutting interest rates this year. ANZ New Zealand Bank yesterday joined Deutsche Bank and ASB Bank in forecasting 50 basis points of cuts over coming months, and traders are pricing in a 42 percent chance of a cut in interest rates at the upcoming June 11 meeting, according to the Overnight Index Swap Curve.

Traders are now looking ahead to the Reserve Bank’s release of its six-monthly Financial Stability Review tomorrow. The New Zealand dollar could weaken further should the bank signal it is progressing with plans to try and dampen the bubbling housing market through macro prudential measures, potentially paving the way for it to cut rates.

ForexTraq provides in-depth analysis for each currency and commodity we review in forex trading. 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 up to the data analysis and information for NZD/USD in our weekly reports.

nzdusd tues

Today’s economic releases actual vs. forecast:

Cur. Event Actual Forecast Previous
  AUD Home Loans (MoM) (Mar) 1.6% 1.0% 1.1%
  JPY 10-Year JGB Auction 0.369%

 

Upcoming Economic Events that you should be monitoring in forex trading:

Wednesday, May 13, 2015

Cur.   Event Actual Forecast Previous
  NZD RBNZ Gov Wheeler Speaks
  JPY Adjusted Current Account 1.34T 0.60T
  AUD Wage Price Index (QoQ) (Q1) 0.6% 0.6%
  CNY Fixed Asset Investment (YoY) 13.5% 13.5%
  CNY Industrial Production (YoY) 6.0% 5.6%
  EUR German CPI (MoM) (Apr) -0.1% -0.1%
  EUR German GDP (QoQ) (Q1) 0.5% 0.7%
  GBP Claimant Count Change (Apr) -20.0K -20.7K
  GBP Unemployment Rate (Mar) 5.5% 5.6%
  EUR GDP (QoQ) (Q1) 0.5% 0.3%
  EUR Industrial Production (MoM) 0.2% 1.1%
  GBP BoE Inflation Report
  EUR ECB Monetary Policy Meeting
  USD Core Retail Sales (MoM) (Apr) 0.5% 0.4%
  USD Retail Sales (MoM) (Apr) 0.2% 0.9%
  USD Crude Oil Inventories -3.882M

Government Bond Auctions

Date Time Country

May 12 08:10 Dutch Eur 2-3bn 0.25% Jul 2025 DSL

May 12 09:15 Norway Eur 4bn 4.5% May 2019 bond

May 12 09:30 Germany Eur 1bn 0.1% Apr 2026 I/L Bund

May 12 17:00 US USD 24bn 3-year notes

May 13 09:10 Italy Eur 2.5-3bn 0.25% May 2018 & Eur 2-2.5bn 1.35% Apr 2022

BTPs, plus Eur 1-1.5bn 1.65% Mar 2032 & 3.25% Sep 2046

May 13 09:30 Germany Eur 3bn 0.5% Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 13 17:00 US USD 24bn 10-year notes

May 14 09:00 Ireland Eur 0.75bn 0.8% Mar 2022 IGBs

May 14 09:30 UK GBP 3.75bn 2% Jul 2020 Conventional Gilt

May 14 15:00 US Announces details of 10-year TIPS sale on 21 May

May 14 17:00 US USD 16bn 30-year bond

NZD/USD Forecast 2105

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