AUD/NZD Weekly Fundamental Analysis for May 30, 2011 – June 3, 2011

By ForexMansion.com

The AUD/NZD pair drooped significantly last week to its lowest level in 15 weeks, after the New Zealand dollar recorded its highest level in 37 months versus greenback, pushing the AUD/NZD pair to the downside.

The strong gains for Kiwi against the dollar came after the dollar lost most of its previous gains against its major counterparts, as the annualized GDP for Q1 showed growth by 1.8% in line with the previous and opposed to the expected upside revision to 2.2%, adding to signs that the Feds won't start monetary tightening anytime soon.

The New Zealand dollar will continue its upside movement as the New Zealand economic recovery gains momentum. Furthermore, the Kiwi finds enough support from the market risk appetite after the US dollar retreated against the high yielding currencies. While mainly kiwi was bolstered on news that China is considering diversifying its holdings with New Zealand investments in sight.

The RBNZ is facing more pressure after the annual consumer prices rose 4.5%, which increased bets that the central bank is going to hike interest rate during this year.

The Australian dollar gained gradually against the greenback, as investors increased their bets that the Reserve Bank of Australia (RBA) will keep the rates steady during the next meeting as the economy aims to support the economic growth.

Also the Aussie was affected by slowing Chinese manufacturing as the Chinese market is the largest for Australian products, which pushed Aussie to decline against the greenback.

Major highlights for this week that will affect the AUD/NZD pair's trading:

Monday May 30:

At 22:45 GMT (Sunday) the New Zealand economy will release the trade balance for April, which showed a surplus by NZ$464 million in March, the NZ trade balance has a heavy impact on the market movement. The trade surplus is expected to expand in April as demand for New Zealand exports continued to rise. Exports rose to NZ$4.53 billion in March, while imports rose to NZ$4.07 billion.

The annualized New Zealand money supply M3 the 12 month ended April will be release at 03:00 GMT, where the prior jumped 5.6%.

The Australian economy is to start the week at 01:30 GMT with the company profits index for the first quarter of the year, which dropped by 2.8% a quarter earlier, also Australia will release the AUD inventories (1Q) that inclined 0.7% in the fourth quarter of 2010.

Tuesday May 31:

At 01:00 GMT the New Zealand NBNZ activity outlook for May is due following 29.5 in April; the BBNZ business confidence for May follows 14.2 during the month of April.

The Australian economy continues to release a number of important economic data, where at 01:30 GMT the building approvals for the April are due following 9.1% rise in March.

Moreover, the market is waiting the Australian current account for the first quarter that will be released at 01:30 GMT, after a drop by A$7299 million in the fourth quarter of 2010. At 01:30 GMT the private sector credit index for April is due following the 0.6% rise in March, and 3.6% during the 12 months ended March.

Wednesday June 1:

At 22.45 GMT (Tuesday) the NZ terms of trade index 1Q will show the expected reading, while it climbed to 0.6% in the 4^th quarter of 2010.

Moreover, NZ nation is to expose at 01.00 GMT its ANZ commodity price for May that inclined by 1.6% in April.

At 23:30 GMT (Tuesday) the Australian economy is to present the AiG performance of manufacturing index for May that has medium impact on the market movement, after 48.4 in April.

At 01:00 GMT Australia is to issue the new home sales index for the month of April that inclined 4.3% in March.

Meanwhile, the market is waiting for economic data with a strong influence on the Australian dollar movement against its major counterparts. At 01:30 GMT the Australian economy will release the first quarter GDP, where the gross domestic product (GDP) expanded 0.7% in the fourth quarter of 2010, and the annualized GDP widened 2.7% during the year ended December, 2010.

The Australian economy will end the day with the RBA commodity price index for May that will be release at 06:30 GMT, where the index reached 106.1 in April. Further, the RBA commodity index SDR (YoY) (MAY) is due at 06:30 GMT after an incline by 32.3% in April.

Thursday June 2:

Australian trade balance for the month of April will be released at 01:30 GMT, after it recorded a surplus by A$1740 million in March, the expectations indicate that Australia trade balance surplus is to expand in April.

Moreover, the Australian retrial sales seasonally adjusted for April are due at 01:30 GMT after it unexpectedly decline by 0.5% in March.

Friday June 3:

At 22:45 GMT (Thursday) the New Zealand economy will release the April reading for building permits that jumped by 2.20% in March.

At 23:30 (Thursday) Australian will present its AiG performance of services index for May that jumped to 51.5 in April. 

Originally posted here

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