The following events and economic reports may influence trading for Asian currencies, where New Zealand’s dollar dropped for the fifth time in six days, reaching the lowest level in more than 6 weeks versus the dollar after commodities that make up a majority of the South Pacific nation’s exports declined.
The market’s movements affected after the Standard & Poor’s agency reduced the U.S. long-term credit rating from AAA to AA+, increasing demand for safe havens currencies such as the Yen and Franc.
Moreover, New Zealand dollar dropped against the Japanese yen after Asian stock markets declined to the lowest level since 2008 on concern the U.S. economy might fall in recession again, damping demand for the higher-yielding currencies.
The NZ unemployment witnessed some improvement in the second three months on rising consumer spending, and employment add to evidence the nation’s economy grew modestly in the second quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter.
In the week ahead, the NZD/USD pair will move in line with the market sentiment that will be the main driver for markets with the focus on the slowing growth and deepening debt crisis in Europe.
Major highlights for this week that will affect the NZD/USD pair’s trading
Monday August 15:
At 22:30 GMT (Sunday), the New Zealand economy is to release the first data during the week with the performance service index for July that reached 54.7 a previous month.
The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.
At 13:00 GMT, theU.S.economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.
Tuesday August 16:
NZ economy will release the producer price inputs for the second quarter at 22:45 GMT (Monday) that is expected to rise by 1.0% compared with a previous 2.2%.
The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.
The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.
As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.
On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.
Wednesday August 17:
The U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.
Thursday August 18:
The U.S. economy is to release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.
At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.
The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.
At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.
Friday August 19:
The New Zealand economy will end the week by releasing its credit card spending at 03:00 GMT after the 0.4% reported rise in June.