Rate cut speculations and negative risk sentiment did not do the Kiwi favors last week.
Can this week’s potential catalysts turn things around for the comdoll?
Here are potential market movers you should keep an eye out for:
Quarterly retail sales
- Statistics New Zealand says retail sales plummeted 15% in the lockdown-affected June quarter
- Spending on eating out, accommodation away from home, vehicles, and fuel all fell sharply in Q2 2020
- Analysts had expected a 4.0% quarterly decrease and a 9.0% annualized dip for the quarter
Trade balance (Aug 25, 11:45 pm GMT)
- The annualized trade deficit was the smallest in six years in May
- Exports inched 1.3% higher while imports dipped by 5.4%
- NZD popped higher on the news but soon gave in to negative risk sentiment
- Trade deficit is expected to narrow further from 426M NZD to 100M NZD in June
- Imports are expected to expand while exports could see a small dip
Market risk sentiment
- With the theme “Navigating the Decade Ahead: Implications for Monetary Policy,” markets will look to major central bankers’ (virtual) Jackson Hole meeting for clues on potential policy responses in the foreseeable future
- Revised GDP readings from major economies like the U.S., Canada, Germany, France, and Switzerland will paint a picture of the global economic recovery
- Rising COVID-19 cases in key cities and what they mean for lockdown prospects will continue to affect overall risk-taking and the demand for high-yielding comdolls like the Kiwi
- Stimulus talks in the U.S., as well as headline-worthy updates in the GOP convention, can also influence market risk sentiment
Technical snapshot
- Bollinger Bands hint of NZD hitting “oversold” levels against JPY and most of its major counterparts
- Daily EMAs show NZD/CAD’s short and long-term bearish trend
- Kiwi is currently seeing short-term bullish momentum against the franc, euro, Aussie, and the pound
- Watch out for retracement or reversal opportunities on NZD/USD
- NZD saw the most volatility against GBP, CHF, USD, and JPY in the last seven days
Missed last week’s price action? Read NZD’s price recap for August 17 – 21!
