Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Kiwi at risk ahead of CPI and Dairy auction

08:08 AEST, Tuesday 15 April 2014

Kiwi at risk ahead of CPI and Dairy auction.

By Garry Dean (Sales Trader, CMC Markets New Zealand)

Wednesday poses as the key day for the NZD this week, with the release of an important data dump from China, the latest Online Dairy auction results, and Q1 CPI in New Zealand. Local traders have priced-in a 0.5% CPI increase for the March quarter, taking the annualised rate to 1.7%. Last fortnight’s Global dairy auction saw prices slump 8.9%, with the currency losing close to two cents. A combined drop of 18% in the past four auctions will significantly increase the focus on tonight’s auction result. The medium-term picture suggests the NZD remains at elevated levels around 0.8700, with daily technical indicators continuing to highlight bearish divergencies from recent traded highs.

Last week’s strong business confidence and manufacturing numbers were supportive of the currency, but it was the release of dovish FOMC minutes that took the NZD to a 3-year high of 0.8746. The minutes suggested US interest rates will remain lower for longer, with traders forced to unwind bets on a stronger USD. Risk aversion on the back of a broad selloff in global equities has capped the NZD however, and news of deadly clashes overnight between pro-Russian separatists and government forces in east Ukraine will limit traders appetite for risk further.

Chinese data on Wednesday includes industrial production and Q1 GDP, and this could have a big impact on commodity currencies. Last week’s Chinese trade numbers were terrible, showing large falls in both exports and imports, and this doesn’t bode well for the GDP read. A drop below the targeted 7.5% is expected, but the potential for additional stimulus measures from the PBOC has reduced somewhat following the release of higher consumer prices last week. This has the potential to impact the NZD, and more particularly the AUD, going forward.


ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

'Irregular Accounting': Voluntary Suspension Of Fuji Xerox Govt Contracting

This suspension gives the Ministry of Business, Innovation, and Employment time to understand the full implications of the report from FUJIFILM Holdings into irregular accounting practices at FXNZ. More>>

ALSO:

MPI: Cow Disease Detected In NZ For First Time

MPI is responding to the detection of the cattle disease Mycoplasma bovis in a dairy herd in South Canterbury... The disease is commonly found in cattle globally, including in Australia, but it’s the first detection of it in New Zealand. More>>

South Island Flooding: Focus Moves To Recovery

As water recedes throughout flood-impacted areas of the South Island, Minister of Civil Defence Nathan Guy has praised the efforts of those who were involved in the response to the flooding... More>>

ALSO:

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fund For PPP Plans: Govt Embraces Targeted Rates To Spur Urban Infrastructure

The government's latest response to the Auckland housing shortage will see central government and private sector firms invest in 'special purpose vehicles' to fund essential roading, water and drains that Auckland Council can't fund without threatening its credit rating. More>>

ALSO: