NZD/USD: prospects for the week
Kiwi’s trying to hold at the 200-day simple MA – since September 2012 the pair has been closing above this line, but today it opened lower.
Analysts at BNZ think that the bias for NZD this week is to the downside: NZD/USD breached $0.8360 on Friday. At the same time, the specialists don’t expect a sustained downtrend and say that support in the $0.8200/8160 region should hold.
New Zealand’s calendar is busy. Watch retail sales late on Monday, Business NZ manufacturing index on Wednesday and PPI Input on Thursday. As Westpac says, “NZ data pulse is riding high but vulnerable to a fall, particularly if the drought’s effects are apparent in the higher frequency data.” On Thursday the nation will also release its Budget which should deliver an on-target return to surplus by 2015. In addition, much will depend on US data. The nation’s retail sales came slightly better than expected (+0.1%), but there will be more releases in the US this week.
Last week the Reserve Bank of New Zealand said that it had sold NZD so far as the exchange rate of the national currency is ‘significantly overvalued’ and ‘problematic’. Today New Zealand’s Prime Minister John key has said that intervention wouldn’t change the course of the currency.
Chart. Daily NZD/USD