Overview
New Zealand's (NZ) economic calendar is reimbursing for the recently thin data line on Wednesday. After the bi-annual Financial Stability Report (FSR) from the Reserve Bank of New Zealand, October month trade numbers and a speech from the RBNZ’s Governor Adrian Orr are up for publishing at 21:45 and 22:00 GMT.
October month Trade Balance, Import and Exports will be immediate the catalysts to follow. Market consensus favor MoM Trade Balance to decline to $-1621M from $-1242M. The monthly figure stood at $-5.21B whereas Exports and Imports $4.47B and $5.71B respective priors.
New Zealand’s central bank met the market’s wide expectations of announcing no change to its Loan to Value Ratio (LVR) restrictions in the FSR. However, it does have the responsibility to balance the central bank’s recently hawkish statements and to manage the recovery in housing market. As a result, traders will be closely observing the comments from the RBNZ’s Governor Adrian Orr about the Financial Stability Report, in Wellington, for fresh clues.
Ahead of the event, the Australia and New Zealand Banking Group (ANZ) says, “the FSR looks like the warm-up act for the main event: the RBNZ’s final bank capital decision, due next Thursday 5 December at 12 noon.”
How could they affect NZD/USD?
While the recent tone of the RBNZ’s Orr has been quite hawkish, any disappointment could add weakness to the Kiwi. Prior to that, expectedly downbeat trade numbers might trigger the NZD/USD pair’s south-run. However, positive outcomes, which are quite likely amid the latest trade positive environment, may help the quote recover some of its latest losses.
Technically, a daily closing beyond the monthly high around 0.6470 becomes necessary for the bulls to target 0.6500 else, a two-week-old support line at 0.6400 and 21-day Exponential Moving Average (EMA) at 0.6390 will gain market attention.
Key notes
NZD/USD: A top performer on busy event calendar, testing trendline resistance
About New Zealand Trade Balance
The Trade Balance released by the Statistics New Zealand is a measure of balance amount between import and export. A positive value shows a trade surplus while a negative value shows a trade deficit. Any variation in the figures influences the domestic economy. If a steady demand in exchange for exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the NZD.
About RBNZ Governor Orr’s speech
Adrian Orr will be the Governor of the Reserve Bank of New Zealand from March 2018. The Reserve Bank uses monetary policy to maintain price stability as defined in the Policy Targets Agreement (PTA). The current PTA requires the Bank to keep inflation between 1 and 3 percent on average over the medium term. The Bank implements monetary policy by setting the Official Cash Rate (OCR), which is reviewed eight times a year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays weak near 1.0650 ahead of Eurozone PMI data
EUR/USD remains on the back foot near 1.0650 in European trading on Tuesday. Resurgent US Dollar demand amid a cautious risk tone weighs on the pair. Investors stay wary ahead of the preliminary Eurozone and US business PMI data.
GBP/USD eases below 1.2350, UK PMIs eyed
GBP/USD is dropping below 1.2350 in the European session, as the US Dollar sees fresh buying interest on tepid risk sentiment. The further downside in the pair could remain capped, as traders await the UK PMI reports for fresh trading impetus.
Gold could see a rebound before resuming the correction
Gold price sees a fresh leg down in Asia on Tuesday even as risk flows dissipate. Receding fears over Middle East escalation offset subdued US Dollar and Treasury bond yields. Gold remains heavily oversold on the 4H chart, rebound appears in the offing.
PENDLE price soars 10% after Arthur Hayes’ optimism on Pendle derivative exchange
Pendle is among the top performers in the cryptocurrency market today, posting double-digit gains. Its peers in the altcoin space are not as forthcoming even as the market enjoys bullish sentiment inspired by Bitcoin price.
Focus on April PMIs today
In the euro area, focus today will be on the euro area PMIs for April. The previous months' PMIs have shown a return of the two-speed economy with the service sector in expansionary territory and manufacturing sector stuck in contraction.