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NZD/USD – Little Movement Ahead of RBNZ Financial Stability Report

After a brutal week to start the month of November, the New Zealand dollar is enjoying a quiet week. NZD/USD is trading just above the 0.65 line in Tuesday’s North American session. In economic news, US NFIB Small Business Index met expectations, while Import Prices disappointed with a fifth straight decline. The New Zealand central bank will release its Financial Stability report, followed by a press conference hosted by RBNZ Governor Graeme Wheeler.

NZD/USD continues to struggle, and last week plunged 250 points, its worst weekly slide since January. The RBNZ will be the focus on Tuesday, as the central bank releases its Financial Stability report, which details the RBNZ’s projections for inflation and economic growth. Any hints about a change in monetary policy could have a sharp effect on the New Zealand dollar. The central bank did not adjust interest rates in October, leaving the benchmark rate at 2.75%. With the next rate decision not until December, we could get an inkling of the central bank’s monetary plans from the Financial Stability report and follow-up remarks from Governor Graeme Wheeler.

The US dollar closed last week with strong gains at the expense of the kiwi, courtesy of the outstanding Nonfarm Payroll report on Friday. The key indicator surprised the markets with a surge of 271 thousand, crushing the forecast of 181 thousand. It was the indicator’s best showing since May. As well, hourly wages were up 0.4%, bringing the annual increase to 2.5%, and the unemployment rate dipped to 5.0%. These excellent readings are further signs that the US economy is close to full employment. The positive news continued on Monday, as the US Labor Market Conditions Index gained 1.6 points in October, up from a flat reading of 0.0 points a month earlier.

The Federal Reserve said in its October policy statement that employment data would be an important factor in a rate decision, and the strong NFP reading on Friday has greatly increased the likelihood of a Fed hike. Still, a Fed rate hike should not be considered a done deal, as not all US releases have been as strong as employment data, such as manufacturing and inflation numbers. Low inflation points to slack in the economy, and the Fed policymakers will need to be assured that the US economy can withstand an interest rate hike before voting in favor of raising rates.


NZD/USD Fundamentals

Tuesday (Nov. 10)

*Key releases are highlighted in bold

*All release times are GMT


NZD/USD for Tuesday, November 10, 2015

NZD/USD November 10 at 15:25 GMT

NZD/USD 0.6527 H: 0.6556 L: 0.6515


NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6233 0.6368 0.6449 0.6605 0.6738 0.6897

Further levels in both directions:


OANDA’s Open Positions Ratio

NZD/USD ratio is close to a split between long and short positions, indicative of a lack of trader bias as to what direction the pair will take next.

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.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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