NZD Weekly Forecast – Inflation to See Low Key Improvements in Q2 2020

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Welcome to a brand spankin’ new trading week!

Major currencies are in for a busy economic calendar and the Kiwi is no exception.

Check out the catalysts that might affect the comdoll this week!

Quarterly CPI (Jul 15, 10:45 pm GMT)

Prices rose by 2.5% in the year to Q1 2020, the highest since Q3 2011
Quarterly prices also inched up by 0.8% after a 0.5% gain in Q4 2019
New Zealand extending its lockdown measures by a week offset the positive impact of stronger-than-expected inflation numbers
Analysts see a 0.4% CPI decline in Q2 2020
Annualized prices could only gain by 1.6% (from 2.5%)

New Zealand does a lot of trade with Australia and China, so top-tier reports from these economies can influence demand for NZ’s exports
China’s trade surplus (Jul 14, Asian session) to ease in June as exports are set to improve faster than imports
Australia’s labor market readings (Jul 16, 1:30 am GMT) could see the unemployment rate hit 7.5% and a net jobs increase of 110K in June
China’s GDP (Jul 16, 2:00 am GMT) to print at 2.4% (from -6.8%) in Q2 2020 while industrial production, retail sales, and unemployment rate are also expected to come in higher than in May

Global coronavirus cases and their impact on economic recovery will continue to affect high-yielding currencies like the Kiwi
Top-tier reports from other major economies, such as interest rate decisions from BOJ, BOC, and ECB and U.S. retail sales release can also influence market risk appetite

NZD is generally on short and long-term bullish trends against its counterparts, though it’s trading below the 200 SMA against the AUD
Watch out for short-term retracements or longer-term reversals against EUR, GBP, and JPY

Kiwi was most volatile against the safe havens and the Loonie in the last seven days