NZD/USD – Kiwi Flat Ahead of New Zealand Trade Balance

NZD/USD is quiet on Tuesday, as the pair trades at 0.6740 early in the North American session. In economic news, US House Price Index improved to 0.5%, matching the forecast. Later on, the US releases two manufacturing reports, Manufacturing PMI and the Richmond Manufacturing Index. There are no New Zealand releases on Tuesday. We’ll get a look at New Zealand Trade Balance on Wednesday.

It was a busy start to the week in New Zealand. Westpac Consumer Sentiment dipped to 109.6 points in the fourth quarter, down from the previous reading of 110.7 points. Still, this figure points to strong optimism among consumers. Visitor Arrivals slipped by 1.6% and Credit Card Spending posted a strong gain of 7.3% year-on-year, but the February report disappointed with a reading of -0.4%. Thursday brings Trade Balance, which has been steadily improving. In January, New Zealand posted its first surplus in eight months, and the upward trend is expected to continue, with the estimate standing at NZ$75 million.

Will the real Federal Reserve please stand up? Last week’s Federal Reserve policy statement appeared to pour cold water on any imminent rate hikes, but “not so fast”, according to two Federal Reserve officials. On Monday, John Williams, president of the San Francisco Fed, said that the Fed could raise rates in April and June, if economic conditions improve. Although the dot plot (an FOMC projection of rate hikes) was lowered at the March meeting, he insisted that the Fed had not changed its path of rate hikes. His comments were echoed by Atlanta Fed Dennis Lockhart, who also said that an April rate move was a clear possibility. Lockhart noted that the US economy was holding up well, despite weak global conditions. Lockart said that the economy was close to full employment and the Fed’s target of 2 percent inflation was attainable. However, it should be kept in mind that neither Willams nor Lockhart is a voting member of the FOMC. The markets will be hoping to learn more about the Fed’s plans from two other Fed presidents who will speak on Tuesday, Charles Evans and Patrick Harker.

NZD/USD Fundamentals

Tuesday (March 22)

• 9:00 US HPI. Estimate 0.5%. Actual 0.5%.
• 9:45 US Flash Manufacturing PMI. Estimate 51.6 points
• 10:00 US Richmond Manufacturing Index. Estimate -1 points

Upcoming Key Events

Wednesday (March 23)

• 17:45 New Zealand Trade Balance. Estimate 75M

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Tuesday, March 22, 2016

NZD/USD March 22 at 9:35 DST

Open: 0.6836 Low: 0.6782 High: 0.6874 Close: 0.6803

NZD/USD Technical

• NZD/USD has been showing marginal movement during the day
• There is resistance at 0.6897
• 0.6738 is providing support

Further levels in both directions:

• Below: 0.6738, 0.6605, 0.6449 and 0.6344
• Above: 0.6897, 0.7011 and 0.7100
• Current Range: 0.6738 to 0.6897

OANDA’s Open Positions Ratio

The NZD/USD ratio is unchanged, as long positions have a strong majority (58%). This is indicative of trader bias towards NZD/USD reversing directions and moving higher.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.