NZD/USD Fundamental Analysis June 28, 2013 Forecast

Analysis and Recommendation:

The NZD/USD recovered to trade at 0.7820 climbing off its low below the 78 price range. Yesterday, US GDP printed below expectations and the US lowered their forecasts. The lower GDP should keep the Fed from tapering its easy money policies.

New Zealand business confidence rose to its highest in more than three years in June, led by the construction sector. A net 50.1 percent of firms expect general business conditions to improve in the year ahead, up from 41.8 percent in May, and the highest level since early 2010, according to the ANZ Business Outlook. Firms seeing a pickup in their own business activity in the year ahead rose to a net 45 percent, up from 34 percent. Sentiment is highest in the construction sector, with a net 73.4 percent seeing better times ahead for the economy, followed by services at 55.2 percent, retail at 51.5 percent and agriculture at 39.6 percent. Manufacturing lagged other sectors at 38.7 percent but was still dramatically higher than the 6 percent recorded a year earlier. Improved business confidence combined with upbeat consumer confidence pointed to the potential for 4.4 percent growth by the end of the year, ANZ said. That is ahead of the central bank’s expected 2.4 percent growth rate and the economy may not have the capacity to grow that fast, ANZ said.

New Zealand recorded a smaller-than-expected trade surplus last month as exports including crude oil and meat missed estimates, offset by a drop in imports.

The trade surplus was $71 million in May, for an annual deficit of $869 million, according to Statistics New Zealand. A monthly surplus of $400 million was expected for an annual deficit of $520 million, according to a Reuter’s survey. The trade-weighted index edged up to 73.50 after the figures were released from 73.46 immediately before. The Reserve Bank says a strong kiwi dollar is constraining the export sector while keeping a lid on imported inflation. The TWI was 10.4 percent higher in May than the same month a year earlier. The trade figures show trade with China helped underpin the trade balance in the latest month and year, being the only nation among New Zealand’s top five markets to buy more of the nation’s exports.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data June 27, 2013 actual v. forecast

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Government Bond Auction

Date Time Country 

Jul 01 09:10 Norway

Jul 02 00:30 Japan

Jul 02 09:15 Austria

Jul 02 09:30 Belgium

Jul 02 09:30 UK

Jul 02 14:30 UK

Jul 03 15:00 US

Jul 04 00:00 Japan

Jul 04 08:30 Spain

Jul 04 08:50 France

Jul 04 11:00 Norway

Jul 05 15:30 Italy