FX News

The New Zealand Dollar (NZD) progressed to 0.6800 overnight against the US Dollar (USD) dropping back to 0.6770 this morning where it settled. Outperforming its rivals after an extra hawkish RBNZ sparking heavy buyer interest in the kiwi after raising the rates for a third time since October. The RBNZ raised rates 25 points to 1.0% in line with expectations with new forecasted projections of continued hikes to 2.2% by the end of this year reaching 3.3% in the fourth Q of 2023, this is in comparison to its November forecast of 2.6%. Read more

Key Points:

• Worldwide coronavirus cases surpass 429.741 million with over 5.935 million official
  deaths.
• New Zealand has 3297 active cases of coronavirus  with 179 people in hospital, just
  1 in intensive care.
• Things are heating up in the crisis between Ukraine and Russia with the Ukraine
  capital Kyiv declaring a state of emergency as the threat of an attack from Russia
  mounts.
• Fed’s Daily says they need more urgency with rate hikes, she is in the camp for a
  March rise to 0.25% and opinion the Fed are way too accommodating.
• Gold and precious metals are on the rise with the price of Gold up at 1910.00 per
  ounce this morning, this equates to over 112.00 in just February.

Monday 21/02
9:15pm, EUR, French Flash Services PMI
Forecast: 54
Previous: 53.1
9:30pm, EUR, German Flash Manufacturing PMI
Forecast: 59.6
Previous: 59.8
9:30pm, EUR, German Flash Services PMI
Forecast: 53.2
Previous: 52.2
10:30pm, GBP, Flash Manufacturing PMI
Forecast: 57.2
Previous: 57.3
10:30pm, GBP, Flash Services PMI
Forecast: 55.6
Previous: 54.1 Read more

Key Points:

• Worldwide coronavirus cases surpass 419.569 million with over 5.876 million official deaths.

• New Zealand has 1573 active cases of coronavirus with 62 people in hospital, none are in intensive care. The NZ border will reopen in stages from the 27th of this month in a 5 step plan of self-isolation for travellers to reduce the MIQ facilities.  
• Canadian CPI y/y up 2.3% compared to 2.1% in December
• France on the wires saying Iran nuclear deal is just days away
• Japanese Machinery orders jumped 3.6% vs -2.0% predicted for December
• Crude Oil is being supported by fears over a Russian invasion of Ukraine with predictions the commodity could push price over $100/barrel in the coming days

Market Overview

Key Points:

• Worldwide coronavirus cases surpass 413.645 million with over 5.842 million official
deaths.
• New Zealand has 981 active cases of coronavirus with 39 people in hospital. The NZ border will reopen in stages from the 27th of this month in a 5 step plan of self-isolation for travellers to reduce the MIQ facilities.
• Ukraine has been informed that Wednesday will be the day of an attack from Russian forces
• US 1 year inflation expectations fall back to 5.8% from 6.0%
• Australian weekly consumer confidence 103 vs 99 prior
• Crude Oil is being supported by fears over a Russian invasion of Ukraine with predictions the commodity could push price over $100/barrel

Major Announcements last week:
US CPI m/m up 0.6% to 7.5% y/y
NZ Inflation expectations print 3.27% vs 2.96%
UK prelim GDP fourth Q 1.0%, down from 1.3% in the third quarter of 2021
NZ House prices seasonally adjusted m/m up 1.4%

Tuesday 15/02
2:30am, USD, FOMC Member Bullard Speaks
5:15am, EUR, ECB President Lagarde Speaks
1:30pm, AUD, Monetary Policy Meeting Minutes
11pm, EUR, ZEW Economic Sentiment
Forecast: 54.4
Previous: 49.4
11pm, EUR, German ZEW Economic Sentiment
Forecast: 55.1
Previous: 51.7

Wednesday 16/02
2:30am, USD, PPI m/m
Forecast: 0.50%
Previous: 0.20%
2:30am, USD, Core PPI m/m
Forecast: 0.50%
Previous: 0.50%
2:30am, USD, Empire State Manufacturing Index
Forecast: 11.9
Previous: -0.7
8pm, GBP, CPI y/y
Forecast: 5.40%
Previous: 5.40% Read more

Market Overview

Key Points:
• Worldwide coronavirus cases surpass 400.040 million with over 5.778 million official deaths.
• New Zealand has 202 active cases of coronavirus with 14 people in hospital. The NZ border will reopen in stages from the 27th of this month in a 5-step plan of self-isolation for travellers to reduce the MIQ facilities.
• Federal Reserve poses rate hikes in March and May to curb rising inflation
• The potential of a war between Russia and Ukraine looks to have deteriorated, although Russia said they would be ready for war in the second week of Feb – we are in this window now
• ECB inflation risk post the ECB has been upwardly reviewed although medium term inflation is not expected to tick over 2.0%
• ANZ predicts the RBA to hike interest rates as early as June, CBA are still tipping an August hike Read more

Monday 07/02
All Day, NZD, Bank Holiday

Tuesday 08/02
4:45am, EUR, ECB President Lagarde Speaks
3:15pm, NZD, RBNZ Gov Orr Speaks

Wednesday 09/02
3pm, NZD, Inflation Expectations q/q
Previous: 2.96%

Thursday 10/02
6am, CAD, BOC Gov Macklem Speaks
6am, USD, FOMC Member Mester Speaks
7:01am, USD, 10-y Bond Auction
Previous: 1.72/2.5
10:05pm, GBP, BOE Gov Bailey Speaks
11pm, EUR, EU Economic Forecasts Read more

Monday 31/01
All Day, CNY, Bank Holiday

Tuesday 01/02
All Day, CNY, Bank Holiday
4:30pm, AUD, Cash Rate
Forecast: 0.10%
Previous: 0.10%
4:30pm, AUD, RBA Rate Statement

Wednesday 02/02
2:30am, CAD, GDP m/m
Forecast: 0.40%
Previous: 0.80%
4am, USD, ISM Manufacturing PMI
Forecast: 57.4
Previous: 58.7
4am, USD, JOLTS Job Openings
Forecast: 10.35M
Previous: 10.56M
10:45am, NZD, Employment Change q/q
Forecast: 0.40%
Previous: 2.00%
10:45am, NZD, Unemployment Rate
Forecast: 3.30%
Previous: 3.40%
All Day, CNY, Bank Holiday
2:30pm, AUD, RBA Gov Lowe Speaks
All Day, All, OPEC-JMMC Meetings Read more

Market Overview

Happy New Year to all Direct FX clients and readers.

The 2021 festive season was less volatile than 2020 but we still saw a fair amount of thin trading with some reasonable swings taking place.

It will take a couple of weeks yet before currency pairs are back in full as market participants filter back into markets.

The kiwi and Aussie have both started 2022 against the wall, underperforming on risk factors, the worst performing currencies contrasting to the safe haven Japanese Yen the strongest. Read more