New Zealand Dollar Joins Rally of Commodity Currencies

Commodity currencies were rising today thanks to the rally of crude oil prices, and the New Zealand dollar was not an exception. But the kiwi had also its own reasons for posting gains.

Unlike the Australian currency, the New Zealand dollar was able to get help from domestic economic reports. Retail sales rose 1.5% in the March quarter from the previous three months (seasonally adjusted), exceeding the medium forecast of 1.1.%. Excluding volatile components, sales were up 1.2%, also above expectations. Coupled with the positive effect of the crude oil rally, the data led to gains of the New Zealand currency.

NZD/USD climbed from 0.6856 to 0.6912 as of 11:30 GMT today. EUR/NZD declined from 1.5928 to 1.5874.

This post was originally published by EarnForex

New Zealand Dollar Tumbles After RBNZ Policy Meeting

The New Zealand dollar slumped today, tumbling more than 1% against its most-traded peers, after the monetary policy statement released by the central bank turned out to be not so hawkish as market participants had expected.

The Reserve Bank of New Zealand left its main interest rate at 1.75% today, in line with expectations. The statement, while not necessarily dovish, was not as optimistic as economists had anticipated. In particular, RBNZ Governor Graeme Wheeler downplayed the acceleration of inflation in March, saying:

“The increase in headline inflation in the March quarter was mainly due to higher tradables inflation, particularly petrol and food prices. These effects are temporary and may lead to some variability in headline inflation over the year ahead”.

NZD/USD sank 0.8% from 0.6936 to 0.6837 as of 12:45 GMT today, and its daily low of 0.6816 was the lowest since June 2016. EUR/NZD climbed 1.5% from 1.5643 to 1.5872.

This post was originally published by EarnForex

British Pound Awaits for Super Thursday

The calendar of macroeconomic reports for Great Britain is almost empty this week with one major exception – Thursday. Almost all economic indicators scheduled for this week will be released on that day, thus the nickname “Super Thursday.” Of course, it should be very important for the performance of the Great Britain pound.

The Bank of England will announce its monetary policy decision on the Super Thursday. While no changes to the policy are expected, traders will closely watch the breakdown of votes. If the number of votes for raising interest rates increases, then the sterling will likely shoot to upside. Yet analysts think that probability of such an outcome is not very high as UK policy makers are likely to be spooked by Brexit worries. The BoE will release its Monetary Policy Summary that may provide insights into the central bank’s plans for monetary policy. The central bank will also release the Inflation Report. Considering that this important report is released just twice a year, it should be a major market-mover.

There will be another events on Thursday besides the BoE policy decision for market participants to watch for as plenty of economic reports are scheduled for release that day. The most important of them will be the manufacturing production indicator. It was falling during the past two months, and forecasters predict yet another month of decline. If such forecasts turn out to be correct, the pound will likely react negatively.

Of course, Britain’s currency reacts not just to news from Britain itself. The sterling (and the GBP/USD currency pair in particular) can be vulnerable to the hawkish outlook for Federal Reserve’s monetary policy. If Fed’s officials make hawkish comments this week, preparing US households for eventual higher borrowing costs, then the UK currency will likely suffer.

This post was originally published by EarnForex

Australian Dollar Lower After Economic Data & Comments from RBA Chief

The Australian dollar slid against its major rivals today as economic data from Australia and China was less than stellar. Comments from central bank’s chief Philip Lowe were not helping the matter as he was explaining dangers of high household debts to the economy.

Australia’s trade balance demonstrated a surplus of A$3.11 billion in March that was lower than A$3.33 billion predicted by analysts and the February reading of A$3.66 billion. The Caixin China Services PMI slid from 52.1 in March to 51.2 in April. The report followed the similarly poor data about manufacturing released earlier this week.

Reserve Bank of Australia Governor Lowe talked about risks that the high level of household debt poses for the Australian economy. He said:

“Given the high levels of debt and housing prices, relative to incomes, it is likely that some households respond to a future shock to income or housing prices by deciding that they have borrowed too much. This could prompt a sharp contraction in their spending, as they try to get their balance sheets back into better shape. An otherwise manageable downturn could be turned into something more serious”.

AUD/USD dropped from 0.7419 to 0.7399 as of 12:00 GMT today, touching the lowest level since January 11. EUR/AUD jumped from 1.4665 to 1.4754. AUD/CHF slid from 0.7379 to 0.7350.

New Zealand Dollar Fails to Hold onto Gains After Employment Data

The New Zealand dollar rallied today following the release of impressive employment data, but the currency was unable to hold gains for long. Currently, the kiwi trades flat versus the US dollar and trimmed its gains significantly versus other most-traded rivals.

New Zealand employment grew by 1.2% in the March quarter from the previous three months, more than analysts had predicted — 0.8%. The unemployment rate dropped from 5.2% to 4.9% while experts expected just a small decrease to 5.1%. The New Zealand currency reacted positively to the data, but was unable to hold onto gains, perhaps because traders were a bit nervous ahead of today’s policy announcement from the US Federal Reserve.

NZD/USD traded close to its opening level of 0.6934 as of 8:25 GMT today after rallying to the high of 0.6968 intraday. NZD/JPY was up from 77.61 to 77.76, touching the session high of 78.01.

This post was originally published by EarnForex