Nzd.usd

[miner]

EUR/USD is good for trading.

[zyreon]

Well it's going to be an active week for NZDUSD:
NBNZ Business Confidence
Trade Balance
RBNZ rate review
building permits and money supply

on the technicals it looks to be maintaining the upward trend, hasn't broken the trendline yet,

i'm approaching this week with a slight bullish bias, looking for a little more rangebound activity, expect tough talk from bollard at the rate review re 4% inflation, not sure what to make of the other event risk though.

any thoughts?

[zyreon]

[quote]quote:23 Jul 2006 22:00 GMT


=CENTRAL BANK WATCH: RBNZ To Stand Pat, May Delay Easing

(This story first ran Friday)

By Shri Navaratnam

A Dow Jones Newswires Column

WELLINGTON (Dow Jones)--The Reserve Bank of New Zealand may delay the start of an easing cycle well into 2007 as a surge in oil prices threatens to keep inflation high, despite a slowdown in economic growth.

Economists expect the central bank at a regular policy review next week will maintain short-term interest rates at a high level. Some say there remains a possibility of a rise in rates if an increase in domestic gasoline prices ripples out and boosts prices throughout the economy.

For Reserve Bank Governor Alan Bollard, the dilemma is similar to that faced by other central banks. Rising oil prices are encouraging tighter policy but at the same time threaten to slow growth.

The RBNZ lifted interest rates nine times and by a total of 2.25 percentage points between January 2004 and December 2005 to cool pricing pressures driven by red-hot economic growth. Even though growth has now peaked, the central bank is keeping policy tight due to the oil-led inflation surge.

Data issued this week showed that the pace of consumer price increases galloped to a 16-year peak in the second quarter. The CPI rose 4.0% from a year earlier, well above the central bank's 1%-3% tolerance range.

Following the data, financial market participants quickly priced into short-term bank bill futures a 50% chance of a rate hike by the end of this year. That chance, according to bill futures prices, has since fallen back to 25%.

All 13 economists polled by Dow Jones Newswires expect the central bank to keep the Official Cash Rate at its current eight-year peak of 7.25% at its six-weekly policy review July 27.

Looking ahead, they ascribe a 15% chance of a rate hike occurring over the next six months, up from 5% just before the latest inflation numbers.

As to when the central bank can start to reduce interest rates, a majority expect the easing cycle to start in March 2007, or later. Previously, they had expected a policy easing in early 2007.

"The RBNZ is in no position to ease interest rates at present, as it guards against the possibility that current high headline inflation will spill over into wage and price setting behavior," said Anthony Byett, chief economist at ASB Bank.

"By the same token, a higher OCR seems unnecessary (in July)...because the RBNZ is also trying to manage a gradual slowdown in New Zealand growth over 2006, assisted by higher global interest rates," Byett said.


Risks Of Second-Round Effects

New Zealand's economy started to slow from the second half of 2005 after over five years of robust growth, which was fueled by a surge in Asian immigrants, a housing boom and a strong labor market.

Production-based gross domestic product in the three months ended March 31 grew 0.7% from the fourth quarter following a 0.1% contraction in the quarter ended December.

Treasury forecasts annual growth will slip to 1% in the 12-months ended March 2007, from 2.2% a year earlier.

But to the consternation of the Reserve Bank, inflation pressures have remained persistent, underpinned by resilient housing and labor markets, and record world oil prices.

Gasoline prices in New Zealand have rose by 32.2% in the second quarter from a year earlier, which was the biggest rise in 21 years.

That leaves economists and analysts focused on Bollard's statement, which will accompany the policy decision next week.

"We think that the focus in the statement will again be on the avoidance of second-round impacts on wages, prices and inflation expectations that might stem from the current period of high headline inflation," said Darren Gibbs, chief economist at Deutsche Bank.

In June, Bollard highlighted his concern that higher inflation could become entrenched and issued a subtl

[roddy]

zyreon agree with your comments regard kiwi, personally would like to see close or sustained move above .6280 before committing to range trade upward trend,your comment slight bullish bias about sums it up for me too

[roddy]

short the flightless bird .6245,also the euro

[zyreon]

so far so good, taking a punt on the trade figures?

from the looks of new reports on global lvl they think its gunna be improved, but all the local reports forecaste it to be slightly worse... maybe i've misread things but hey we'll see.
Though even if it does tank on the release it will probably be somewhat underpinned by the RBNZ tomorrow so i'm thinking keep my shorts on and then if it falls take profits and maybe reverse once it settles down.

[zyreon]

well lucky i took half my position off before the figures

[roddy]

Hi Zyreon
imho think daily and weekly charts are bearish until it breaks .6280 and then.6450. so after reading Arcos {read it for free} will be bearish in a bear market and bullish in a bull market.
I had a punt on trade figures as well and had a
tight stop so no damage done.

[arco]

Well, its looks like the R shoulder of the H&S may still be forming, and who knows, 6560-6590 could even be possible, but at that point Mr Gann could put up some strong resistance.

Anyway for now, check out the nice looking Flag on the 15m.

arco in QLD

[kittydashwood]

Have we seen a shorterm floor for the NZD?