Geopolitical tensions helped drag the New Zealand dollar lower last week. Can this week’s catalysts change the tides in favor of Kiwi?
Here are events you need to watch:
ANZ business confidence (Jul 31, 2:00 am GMT)
ANZ’s business confidence index unexpectedly fell to -38.1 in June, lower than May’s -32.0 reading and the -22.7 figure that analysts had expected. Heck, it’s the lowest reading in eight months!
Not surprisingly, the New Zealand dollar lost a few pips across the board. However, the downside moves only lasted until the Asian session, as London session traders priced in other catalysts.
Will business owners feel a bit more optimistic in July? Take note that China is printing its manufacturing and non-manufacturing PMIs at the same time as New Zealand’s data. On top of that, Australia is also publishing its quarterly CPI numbers thirty minutes after ANZ’s report.
Does this mean that you shouldn’t trade ANZ’s release? Heck no!
Remember that the Reserve Bank of New Zealand (RBNZ) members pay attention to business confidence numbers. Now that they’re considering “unconventional” monetary policy, you can bet a few pips that significant hits or misses can affect Kiwi’s intraday price action!
Countercurrency price action
One look at the forex calendar tells us that this week is NFP week on steroids. Aside from the usual NFP-related shenanigans, major central banks like the Fed, BOJ, and the BOE are also scheduled to share their latest monetary policy decisions.
Meanwhile, other major economies will be busy churning out top-tier reports. We have China’s official PMIs, Australia’s quarterly inflation, Canada’s GDP, Canada’s trade balance, and a ton of U.S. reports that could affect overall risk sentiment.
And then there’s trade deal negotiations scheduled to resume between the U.S. and China. Washington is sending over its reps to Beijing this week though National Economic Council Director Larry Kudlow has warned that he “wouldn’t expect any grand deal.”
Missed last week’s price action? Read NZD’s price recap for July 22 – 26!