The Kiwi saw see-saw price action last week. Will this week’s set of top-tier events provide a clearer direction for the comdoll?
The quarterly retail sales data may have already affected the currency’s price action, but here are other events that might influence its intraweek trends:
Trade balance (Feb 26, 9:45 pm GMT)
For the first time in seven months, New Zealand posted a trade surplus in December. The 264M NZD figure was more than the 225M NZD figure that analysts were eyeing.
Unfortunately for the bulls, the Kiwi didn’t see much momentum from the report because traders were more focused on the annualized figures. See, the annual trade deficit also widened to an 11-year high of 5.9B NZD thanks to a sharp rise in fuel and crude oil imports.
This week market geeks expect to see the monthly figure return from a surplus to a deficit of 300M NZD. The annualized figure is expected to tighten from 5.9B NZD to 5.5B NZD, however.
We know from last week’s price action that traders are already jittery about New Zealand’s trade prospects. Worse-than-expected releases this week could drag the Kiwi lower, while upside surprises could extend its gains from the previous week.
ANZ business confidence (Feb 28, 12:00 am GMT)
Business confidence rose 13 points to -24.1 in December, as firms were more optimistic on profitability, employment, export intentions, investment, and perceived availability of credit.
Because the report is widely-considered to be a good leading indicator of New Zealand’s economic performance, the Kiwi jumped at the upside surprise and hit its weekly highs before other news events weighed on it.
Will we see a back-to-back improvement for January’s data? Keep in mind that other events, such as Australia’s quarterly capex and China’s official PMI reports are scheduled hours after the release. That means that there’s no guarantee that the Kiwi will sustain its post-report momentum this time!
Global risk sentiment
Just last week alone headlines from Australia, China, and the U.S. had affected the Kiwi’s price action.
This week pay close attention to any and all updates related to the U.S.-China trade negotiations. Good news from either (but especially China’s) side could be good for New Zealand’s export demand.
Meanwhile, headlines related to Brexit, the central banker speeches scheduled throughout the week, and other top-tier reports could also affect the Kiwi’s price action, so make sure you stick around in case we see other market-movers!
Missed last week’s price action? Read NZD’s price recap for February 18-22!