New Zealand dollar loses outpaced those of fellow commodity currency,
the Australian dollar, late last week, sending AUDNZD through its 100day
SMA and then to a resistance zone just shy of 1.1600. Both currencies
were hit by a spike in China’s money market rates after the PBoC elected
not to pump the market full of liquidity. The kiwi suffered a little
worse than the Aussie, with the latter being supported by the notion
that the RBA may be at the end of its easing cycle.
This week the
market will be keeping one eye on China’s money markets and the other
on a slew of data and potential market moving events. In Australia, RBA
Governor Stevens is speaking on Tuesday and building approvals and
producer prices data are due later in the week, with the latter two
expected to increase 2.8% m/m and 0.3% q/q respectively. A little
further south and investors will be watching a monetary policy meeting
at the Reserve Bank of New Zealand on Thursday.
We aren’t expecting any
major policy announcements from the bank but we will be on the lookout
for any surprises, which could come in the form of more attempts to talk
down the kiwi or pushing an unavoidable rate hike further into the
future. Also, China is due to release its official manufacturing PMI
figures for this month and with the entire market still trying to work
out when the Fed is going to start tapering its asset purchases, US data
releases will be closely watched.
Support Level
- 1.1520 – 100day SMA
- 1.1445
- 1.1405 – 50day SMA
Resistance Level
- 1.1580
- 1.1660
- 1.1760
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