NZD
There was little out in the way of data in New Zealand last week, and it was a mixed bag of results.  The economic survey of manufacturing for the March quarter showed that sales volumes rose 0.2 percent in the quarter, driven by meat and dairy product manufacturing.  Excluding dairy and meat, sales fell 6.5 percent.

Migration levels for May were kept fairly constant with a monthly net inflow of 2,690 people recorded.  Visitor arrivals rose by 0.2 percent in May.

Local dataflow picks up this week but the reality is that eyes this week will be on the March quarter GDP release on Friday.  The economy is expected to contract by 1.0 percent – the fifth consecutive quarterly fall.

The week ahead:
NZD
Monday 22nd – Visitor Arrivals (May) mom, Credit Card Spending (May)yoy
Wednesday 24th – Westpac Consumer Confidence (Q2)
Thursday 25th – Current Account Balance (Q1)
Friday 26th – GDP (Q1)qoq

AUD
Monday 22nd – New Motor Vehicle Sales (May)mom

GBPNZD
Mixed bag of results for the UK last week, some ringing true of green shoots emerging in the economy other data an indication that it will take a while for the UK economy to crawl out of the current trough.  Jobless Claimant count came through stronger than anticipated with 39.3k for the month of May as opposed to 49.6k the month prior.  Retail sales for May were weaker than April, down -0.6 percent month on month. UK inflation also surprised to the upside last week with CPI 0.3 percent above consensus.

There was a short lived rally from Sterling camp last week when we saw the rate push above the 2.60 briefly for the second week in a row, the rate spent a brief amount of time just above the 2.61 on Wednesday before falling back to close the week at 2.56. 

Focus will go to data out in New Zealand this week with GDP out for Q1 on Friday.

The week ahead in the UK:
Monday 22nd – Rightmove house Prices (Jun)mom

GBPAUD
Sterling spent the majority of last week climbing against the Australian Dollar.  Monday through Tuesday it was in a steady direction north with the rate hitting above the 2.07 level, the highest the rate has been since the last week of April.  From there the rate dropped away and closed the week just shy of the 2.04 level.

Very little out data wise from both countries could lead to relatively little movement this week, keeping in the current band of 2.04 – 2.06 band for the meantime.  For data out in the UK this week please refer to GBPNZD above.

EURNZD
In positive news in the Euro zone last week the influential ZEW index showed that sentiment in the German economy was significantly higher than it has been over the past 6 months coming in at 42.7 as opposed to 28.5 previously.

The first half of last week there was little movement in the EURNZD rate, it hovered around the 2.19 level. On Wednesday there was some Euro strength pushing the rate above the 2.20 level briefly before falling away and closing on Friday in NZDs favour at EURNZD 2.17.

The New Zealand Dollar might struggle to keep up with the strength it has been showing lately and  this week we could see the rate climb back towards the 2.20 level leading up to the GDP figure out here in New Zealand on Friday.

The week ahead in the Euro zone:
Tuesday 23rd – PMI (Jun), Gfk Consumer Confidence Survey (Jul)
Wednesday 24th – Current Account (Apr)
Thursday 25th – Industrial New Orders (Apr) mom
Friday 26th – German Import Price Index (May)mom

EURAUD
Last week this pairing ended up at the same point it began the week in the low 1.73’s.  It spent the initial part of the week climbing and touched on the 1.76 very briefly on Wednesday to then on Thursday lose 2 cents throughout the day. 

Euro has only managed to touch north of the 1.76 level twice this month.  If we seem further green shoots out in the Euro zone in the form of the consumer confidence survey for Germany out on Tuesday, surrounding that announcement we could see Euro climb against the AUD.  For data out in the Euro zone please refer to EURNZD above.

NZDUSD
US Jobless claims came in stronger than expected last week at 6687K as opposed to the 6840K figure expected.  CPI for May was up 0.1 percent and housing starts in May were stronger showing 532K up form 454K for April.

This week all focus is on the FOMC statement.  The Fed announced it policy initiative of QE in the middle of March with a NZD of around NZDUSD 0.51 at the time.  The NZD and other commodity currencies have not looked back since.  What the Fed signals about their current stance on QE could be the most directional statement of this quarter for the currency markets.

The week ahead in the US:
Thursday 25th – New Home Sales (May), FOMC Rate Decision
Friday 26th – GDP Annualised (Q1), Initial Jobless Claims (w/e Jun21)

AUDUSD
Little to report on in the movements of the AUDUSD rate last week the rate closed just above the AUDUSD 0.80 level where it opened on the week on Monday, the majority of the week the rate spent range trading between the 0.789 to 0.803 level. 
This week the ball is in the USDs court and eyes will be on the outcome of the FOMC meeting.

AUDNZD
Recently the New Zealand dollar has slowly but surely been edging away against the AUD and last week was no different.  On a whole the AUDNZD rate fell 1.5 cents during the course of last week. On average for 2009 the AUDNZD rate has spent the majority of its time above the 1.26 level, at this stage the 1.25 level is proving quite difficult for the NZD to drive below in the current market.

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Please feel free to contact me (renee.doughty@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar.
 
If you would like to discuss your foreign exchange requirements then please don’t hesitate to call our Southern Hemisphere Office on our New Zealand Free phone number  0800 666114 , or Australian Free phone number 1800 701540.
 
Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.
Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts.