- New Zealand Q1 2015 GDP at 0.2% vs. 0.6% estimate
- New Zealand Q4 2014 GDP downgraded from 0.8% to 0.7%
- SNB interest rate decision coming up
- U.K. retail sales to show flat reading in May?
- Greek debt talks to resume in Eurogroup meetings today
No wonder the New Zealand dollar is nicknamed after a flightless bird! The Kiwi had its wings clipped once more after New Zealand released a weaker than expected GDP report. The economy expanded by only 0.2% in the first quarter of the year versus the projected 0.6% growth while the previous quarter’s reading was downgraded from 0.8% to 0.7%. Hmm, I smell another RBNZ rate cut cooking…
NZD/USD is down 90 pips (-1.30%) after briefly testing the .7000 handle during the FOMC statement, NZD/JPY is lower by 134 pips (-1.57%) after breaking below the 85.00 mark, and GBP/NZD is up by a whopping 314 pips (+1.37%).
With the lack of other top-tier reports in today’s Asian trading session, it looks like previous releases are still driving price action among most forex pairs. The U.S. dollar is reeling from the disappointing FOMC statement while a few pound bulls are still enjoying the after-party from the upbeat U.K. events yesterday.
USD/JPY is down 34 pips (-0.28%) and is testing support at 123.00, EUR/USD is up 23 pips (+0.22%), and USD/CHF is lower by 15 pips (-0.17%) so far. GBP/USD seems to be taking a break around the 1.5800 handle (+0.03%) while GBP/JPY has retreated by 48 pips (-0.25%), but the pound continued to advance against the commodity currencies.
The upcoming U.K. retail sales release might make or break the pound’s rallies, as the May report could show a flat reading. A weaker than expected result could force the U.K. currency to return some of its recent wins, but there could be a chance of seeing an upside surprise if the downturn in inflation and the pickup in wages combined forces to print a solid increase in consumer spending.
Also lined up today is the SNB rate decision. While SNB head Thomas Jordan and his boys aren’t really expected to announce any changes in monetary policy, better pay close attention to their rhetoric to see if they are inclined to keep franc gains in check. Wouldn’t hurt to be extra careful, right?
Greek debt talks could come back in the limelight today, as these are set to resume during the Eurogroup meetings. The lack of progress (again!) could keep the euro’s gains limited, but it looks like markets are already warming up to the idea of seeing a debt default or having Greece kicked out of the euro zone… anything that puts an end to all this drama!
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
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