We think the news will be mixed with an overall bullishness to the pair as the USD sinks with inflation. NZD's lower inflation rate of 1.5% is a leg up on the USD. At least in the relative short term, seeing the kiwi gain traction over the dollar looks more possible now that the USD inflation rate looks worse than expected.
Rate and Policy Statements:
NZD reportedly added jobs in early May which shows a positive change from last quarter at 0.6% and a fall in unemployment rate from 4.9% to 4.7%. Next Tuesday, May 25 will be a big day for the currency with cash rate, monetary policy statement, rate statement and press conference. The pair is already on the rise based off the optimistic sentiment from the RBNZ monetary policy statement tomorrow.
Positive retail sales came out on the kiwi yesterday evening reporting better-than-expected numbers sitting at 2.5% growth q/q which was forecasted at -1.8%. This big jump in growth is sales is a great sign for the bulls on this pair, and paired with lower inflation, could boost price higher.
This pair moves similarly to AUDUSD, and we are bullish on that pair. Price may likely find support in the .71400s as it closed under a long term trend line on the 4H chart. Price moved up from lows and is nearing the top of a wedge. Support lies below at .71444 if RBNZ news worries investors. But otherwise, it looks like the pair will at least test resistance on that falling trend line this week.
Retail is majority short even after good retail sales news on NZD. The past month has been an uptrend for the pair, so it would take the big money to sell for us to start getting bearish sentiment.
9/17/2021 Stocks are down -0.58% this morning after coming down to test a significant level of support once again. While stocks fall, the dollar rises in the anticipation of sooner-than-expected tapering by the Fed along with a hike in interest rates starting in 2022. Our outlook Other than September being one of the worst months […]
9/16/2021 The Euro-Dollar pair is down over 0.5% today after several days in the red. Today's speech by EU president Lagarde mentioned how the economic recovery had come quicker than expected six months ago. This was praised by the prompt vaccine distribution so citizens could get back to work. Across the pond, the US just […]
9/14/2021 This morning's report on CPI m/m and core CPI m/m came in at a lower percentage than expected which resulted in a falling dollar pre-New York session. The USD is now volatile under the uncertainty of potential tapering and rising rates while the equities market seems to be rising because of this. Our outlook […]
9/13/2021 Big money has been moving out of Australia's currency for nearly a month now which has been the biggest drop in long contracts in this amount of time year-to-date. Australia's dollar index (AXY) is up 0.06% at 73.61 on the day after rebounding from the lows around 71.19. Our outlook Australia's economy has surprised […]