New Zealand Dollar (NZD) Forecast: Chinese Data Could Cause ‘Kiwi’ Declines
Although the ‘Kiwi’ floundered on Thursday following the release of concerning Chinese manufacturing figures, the New Zealand Dollar was able to recover ground at the close of the week.
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The South Pacific currency was holding steady against its bolstered US counterpart and was stronger against the Australian Dollar as the local session ended.
According to a Reuters report, the New Zealand Dollar ‘has generally outperformed the commodity currency pack because of the likelihood the Reserve Bank of New Zealand will become the first major central bank to start tightening rates at its March 13th monetary policy statement’.
However, the ‘Kiwi’ declined modestly against the Pound during European trading as the British asset strengthened in spite of less-than-impressive domestic reports.
Although UK retail sales fell by 1.5 per cent in January, 0.3 per cent more than forecast, the Pound edged higher against several of its major currency counterparts.
The Pound was boosted by the news that the UK recorded a budget surplus last month, although the surplus of 4.7 billion Pounds was lower than the 8 billion Pound surplus expected by economists.
Next week the New Zealand Dollar is likely to fluctuate following the release of the Reserve Bank of New Zealand’s 2-year inflation expectation report, domestic trade balance figures and the nation’s business confidence index.
Data from China will also have an impact on the commodity-driven ‘Kiwi’.
If China’s property price and conference board leading index data adds to concerns that the world’s second largest economy is struggling, we forecast that the New Zealand Dollar could falter over the course of next week.
The New Zealand Dollar is currently trading against the Pound in the region of 0.4986 and is trading against the US Dollar in the region of 0.8294.