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25 Jun 2013
Flash: Consolidation the underlying theme in NZD/USD – BNZ
FXstreet.com (New York) - Local developments in New Zealand have taken a back seat lately as far as drivers of the NZD are concerned, suggests Mike Jones, an analyst at BNZ.
Indeed, the currency looks oversold based on local fundamentals alone. This looks set to continue in the short-term as all eyes remain on the US. However, this week offers plenty of fodder for local economy watchers. The two data items with most NZD relevance will be Thursday’s ANZ business survey, which looks set to receive a leg-up from improved farming confidence, and May data on RBNZ FX transactions. We suspect this will show net NZD selling by the RBNZ continued in May, albeit at a slower pace than in April.
“Overall, we expect consolidation to be the main theme in the NZD market this week. Positive local data and a ‘short’ speculative market may limit the downward pressure from any additional USD gains. We look for a 0.7680-0.7840 NZD/USD range. There is no NZ or Australian data due for release today, portending a quiet local trading session. For NZD direction on the day, we’ll be keeping an eye on the Chinese liquidity situation and the follow-on from yesterday’s stock market carnage.” Jones adds.
Indeed, the currency looks oversold based on local fundamentals alone. This looks set to continue in the short-term as all eyes remain on the US. However, this week offers plenty of fodder for local economy watchers. The two data items with most NZD relevance will be Thursday’s ANZ business survey, which looks set to receive a leg-up from improved farming confidence, and May data on RBNZ FX transactions. We suspect this will show net NZD selling by the RBNZ continued in May, albeit at a slower pace than in April.
“Overall, we expect consolidation to be the main theme in the NZD market this week. Positive local data and a ‘short’ speculative market may limit the downward pressure from any additional USD gains. We look for a 0.7680-0.7840 NZD/USD range. There is no NZ or Australian data due for release today, portending a quiet local trading session. For NZD direction on the day, we’ll be keeping an eye on the Chinese liquidity situation and the follow-on from yesterday’s stock market carnage.” Jones adds.