NZD
It was a light week on the data front here in New Zealand last week.  The economic survey of manufacturing for the December quarter showed that total manufacturing sales fell 5.4 percent.   Excluding meat and dairy manufacturing, sales fell 5.1 percent.

External migration in February showed net migration rose by 1,670 people.  Short-term visitor arrivals rose 2.9 percent, but are down 8.5 percent on a year ago.  Total credit card billings rose by 0.5 percent in February.

AUD
The Reserve Bank of Australia Board Minutes for the 3 March meeting were surprising for what was not there – a strong justification for leaving rates on hold.  Rather, the Minutes indicated that the decision was a ‘coin toss’.

Also a quiet week on the data front for Australia, in February new motor vehicle sales fell 3.5 percent following a decrease of 1.1 percent the month before.

The week ahead:
NZD
Wednesday 25th – Westpac Consumer Confidence
Thursday 26th – Current Account Balance (Q4)
Friday 27th – GDP (Q4)qoq, yoy, Trade Balance (Feb)

AUD
Thursday 26th – Reserve Bank releases financial stability review

GBPNZD
UK unemployment figures showed a pretty awful picture last week, the amount of people on the dole rose by 138,400 against a 84,800 that was expected.  The unemployment rate held steady at 6.5 percent, consensus is that we will see the 10 percent unemployment in the UK before these problems are over.

Department of councils and local government house price results were in line with expectations and down 11.5 percent from this time a year ago.
Significant movements were had in New Zealand Dollars favour last week, the NZD gained 10 cents on Sterling by the end of the week.  On Monday the GBPNZD rate opened at 2.6770 and slid continuously throughout the week and at end of play Friday closed at 2.5967.

The week ahead in the UK:
Tuesday 24th – CPI (Feb) mom and yoy
Thursday 26th – Total Business investment (Q4) qoq, Retail Sales (Feb) mom
Friday 27th – GDP (Q4)qoq, Current Account (Q4)

GBPAUD
The Australian Dollar was one of the commodity currencies benefitting from the debasement of the greenback last week.  Sterling fell 5 cents against the AUD ending the week at lows we have not seen since the beginning of January.

With a significant amount of data out in the UK this week expected to further highlight the poor economic conditions in the UK at present this rate could edge towards the GBPAUD 2.05 level.  For data out in the UK please refer to GBPNZD above.

EURNZD
The Euro zone had some stronger than expected results out last week, Industrial production was only down 3.5 percent in January as opposed to an expected 4 percent decrease.  March economic sentiment also came in stronger than expected at -6.5 from February’s -8.5.

Movements in the EURNZD rate weren’t as one-sided as with Sterling’s pairings last week.  The first half of the week Euro climbed from 2.448 on Monday to the high of the week 2.4873 on Thursday, from there the NZD took control and steered the rate on a rapid decline ending play on Friday at 2.422.

This week with commodity currencies performing well the rate could slowly head further south in the short term.

The week ahead in the Euro-zone:
Monday 23rd – Construction Output (Jan) mom
Tuesday 24th – German PMI Manufacturing, ECB Current Account (Jan)
Wednesday 25th – German IFO Business Climate (March)
Thursday 26th – German Consumer Confidence Survey (April)

EURAUD
The EURAUD rate ended up at 1.966 the same level where it began the week, in the interim EUR climbed to the high of the week on Thursday of 1.9958 before trailing back to the 1.96’s.

A fair slate of data releases this week are likely to confirm that the first  quarter saw a sharp fall in output as inventories were slashed further.  The advance PMI surveys for manufacturing and service sector output are unlikely to show any improvement in March, instead remaining well below the 50 ‘breakeven’ level at 33 and 36 levels respectively.  For data out in the Euro zone please refer to EURNZD above.

NZDUSD
The NZD had a massive rally from 0.5120 to 0.5621 last week as a short market already being squeezed accelerated as the US began quantitative easing.  With the US printing cash and reducing the cost of borrowing that cash, it is not surprising that we are experiencing an altered value of the USD.  The reasoning is simple: if you have more of something the price should go down.

The week ahead in the US:
Tuesday 24th – Existing Home Sales (Feb) mom
Wednesday 25th – House Price Index (Jan) mom
Thursday 26th – Durable Goods Orders (Feb), New Home Sales (Feb) mom
Friday 27th – GDP annualized (Q4), Initial Jobless Claims (w/e Mar 22)

AUDUSD
The USD plunged last week in response to the Fed’s Thursday morning announcement that it was ramping up quantitative easing, in particular by purchasing US $300bn in Treasury securities which stoked fears that a massive increase in the supply of money would debase the currency.  The USD index initially dived 2.7 percent, its largest one-day fall in around 25 years, and then fell a further 1.7 percent.

AUDUSD jumped towards 0.6950 the highest level the rate has been since January 12th from below 0.6550 at the start of the week.  This week after shocks might be felt but the 0.70 will prove to be a hardy resistance level at present.  For data out in the US please refer to NZDUSD above.

AUDNZD
Tables have turned for the New Zealand Dollar against the AUD last week with moves being predominantly in the NZD’s favour.  The rate commenced the week at 1.2437 on Monday and on closed on Friday at 1.2328.

Monthly consumer sentiment polls In New Zealand point to a slide in Westpac’s quarterly index – something down in the mid-90s region looks most likely – while February’s trade flows will most likely show further moderation, albeit nothing like the recent collapses seen in many other countries.

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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. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.