The NZDUSD pair is also called the kiwi pair, after the New Zealand popular bird. Even that tells you almost anything you need to know about the New Zealand. However, there’s some more of course as the economy down there is mainly based on agriculture as there are more sheep than people on the island. Taking that into account, one may want to know where the diary index is released as the kiwi is going to strongly fluctuate at that release.
One of the main exporting products is represented by powder milk, to China, so what is happening to China in terms of economic growth (expansion/recession) is important as if demand plummets, then likely the milk prices will plummet as well, and therefore the kiwi pairs will be affected too.
RBNZ (Reserve Bank of New Zealand) is meeting on a regular basis, monthly, on a Wednesday, and sometimes it is coming right after the FOMC meeting and statement so the ones that are trading the NZDUSD may have the surprise of seeing the pair moving in one direction with the FOMC and in another one during the RBNZ.
The most important things to consider out of New Zealand are, of course, the GTI Index (dairy index) and RBNZ meetings, press conferences and speeches.
Important Economic Releases To Watch In New Zealand
By far milk prices and their fluctuations are influencing the way the NZD is moving and for that the GDT Index is key in trying to forecast future price action.
Besides that, regular releases like the GDP (Gross Domestic Product) and inflation rate are the ones to watch as the central bank, the RBNZ (Reserve Bank of New Zealand) is taking them into account before establishing the interest rate.
The central bank interest rate decision is always being followed up by a press conference and this is a tricky conference as questions from press representatives are being asked and you never know how a central banker can downplay any previous interest rate decision.
Important Economic Releases To Watch In United States
When it comes to United States, we must start with the fact that this is the biggest economy in the world and it goes without saying that a lot of important economic news are being released each and every month.
Because the central bank of the United States, the Federal Reserve, is having a dual mandate, it is obvious that jobs data (Non-Farm Payrolls) and inflation (CPI) are the ones that really matter. However, there are some other pieces of economic releases that influence markets, as follows: ISM (Institute for Supply Management) Manufacturing and Non-manufacturing (these are the equivalent of Europe’s PMI’s mentioned a bit earlier, Retail Sales (released on a monthly basis), GDP (release on a quarterly basis), PPI (Producer Price Index), ADP (private payrolls), Durable Goods Orders, etc.
What To Expect From Economic Releases
Look for the NZD pairs to travel aggressively when interest rate decisions are being announced as with current downturn in global economy commodities were the ones to suffer the most. As a consequence, both Australia and New Zealand had to adapt to the new situation and slashed the interest rates quite aggressively.
NZD pairs are extremely tricky to trade and especially the NZDUSD pair as for the FX market it is requiring little margin. This makes room for overtrading to appear and this is something everyone wants to avoid.
Changes in inflation expectations are moving the pair too and I would say economic releases out of the US are more important than the ones out of New Zealand when it comes to the way the NZDUSD pair is moving.
The kiwi pair because of the low margin required and a positive swap, is one of the favorite one for trading it on the long side and this makes the short side exposure vulnerable to quick and vicious moves. However, in binary trading this is not the case but considering that positive swap is influencing a trader’s perception when choosing what currency pair to trade is important for future price movements.
FOMC (Federal Open Market Committee) is meeting every six weeks and forward guidance and economic projections are being published as well as a press conference every 2-3 meetings. During these events, the US dollar is moving sharply and as a consequence all US dollar related currency pairs are moving as well, NZDUSD included.
More details and a complete list of tips and tricks are to be found by watching the two recordings that are coming with this educational project as we’re going to discuss the economic releases based on the economic calendar and divide them according to the importance. Understanding fundamental analysis is vital when it comes to successfully trading financial markets.