NZD/USD is showing limited movement on Wednesday, continuing the lack of movement which marked the Tuesday session. In the North American session, the pair is trading at the 0.68 line. On the release front, the New Zealand GDT Price Index posted a gain of 2.1%. In the US, today’s highlight is the minutes from the Federal Reserve’s last policy meeting. We’ll also hear from two Fed members, Loretta Mester and James Bullard. Australia releases AIG Construction Index. On Thursday, the US releases Unemployment Claims, and Janet Yellen will deliver a speech at event in New York.
New Zealand’s resource-based economy is heavily dependent on its export sector. Weak global demand, highlighted by the Chinese slowdown, has been bad news for the island economy, which conducts 20 percent of its trade with the Asian giant. There was positive news on Wednesday, as the GDT Price Index posted a strong gain of 2.1%, its best reading since December 2015. Earlier in the week, ANZ Commodity Prices declined 1.3% in March, marking its fourth decline in five months. NZIER Business Confidence slid to 2 points in the fourth quarter, compared to 15 points in the previous release. This points to a sharp drop in optimism in economy on the part the business sector.
Will the real Fed please stand up? The markets have been treated to mixed messages from the US central bank, and this lack of communication is certainly not looked well upon by the markets. Last week, Janet Yellen sent the US dollar flying on its backside, following a surprisingly dovish speech in New York, in which she poured cold water on speculation of an April rate hike. Prior to her speech, several Fed members issued hawkish comments, some going as far as calling for a rate hike at the April policy meeting. Analysts will be paying close attention to the Fed minutes on Wednesday, looking for clues as to further rate projections. The markets are hoping the minutes will provide some clarity about the Fed’s monetary plans. The release of the minutes should be treated as a market-mover, and we could see some volatility in the markets following this release. In addition to the minutes, two FOMC members will deliver remarks on Wednesday.
Tuesday (April 5)
- 10:27 New Zealand GDT Price Index. Actual 2.1%
Wednesday (April 6)
- 10:30 US Crude Oil Inventories. Estimate 3.1M
- 12:20 US FOMC Member Loretta Mester Speaks
- 14:00 US FOMC Meeting Minutes
- 18:30 US FOMC Member James Bullard Speaks
Upcoming Key Events
Thursday (April 7)
- 8:30 US Unemployment Claims. Estimate 271K
- 17:30 US Fed Chair Janet Yellen Speaks
*Key releases are highlighted in bold
*All release times are DST
NZD/USD for Wednesday, April 6, 2016
NZD/USD April 6 at 10:20 DST
Open: 0.6798 Low: 0.6770 High: 0.6817 Close: 0.6801
- NZD/USD posted gains in the Asian session. The pair retracted in European trade but has reversed directions in North American trade and is showing gains.
- There is resistance in 0.6897
- 0.6738 is providing support
Further levels in both directions:
- Below: 0.6738, 0.6605 and 0.6449
- Above: 0.6897, 0.7011, 0.7100 and 0.7231
- Current Range: 0.6738 to 0.6897
OANDA’s Open Positions Ratio
The NZD/USD ratio is showing gains in long positions on Wednesday. Long positions have a strong majority (60%), which is indicative of trader bias towards NZD/USD breaking out and moving to higher ground.