Yesterday’s trade saw NZD/USD within the range of 0.6500-0.6566. The pair closed at 0.6532, dipping 0.04% on a daily basis and extending the loss from Friday. The daily low was a higher-low test of the low from Friday, while the latter has been the lowest level since October 6th.
At 8:01 GMT today NZD/USD was down 0.08% for the day to trade at 0.6528. The pair touched a daily low at 0.6521 during early Asian trade, which was a test of the daily S2 level.
Today NZD/USD trading may be influenced by a number of macroeconomic reports as listed below.
RBNZ Financial Stability Report
At 20:00 GMT the Reserve Bank of New Zealand is to publish its Financial Stability Report, which provides a thorough assessment of risks and efficiency of the financial system in the country. This release usually triggers a limited-to-moderate volatility of the currency pairs including the kiwi dollar.
RBNZ Governor Graeme Wheeler is scheduled to take a statement after the publication.
Export and import prices
Prices of imported goods in the United States probably fell for a fifth consecutive month in October, dipping at a monthly rate of 0.1%, according to market expectations. In September import prices were 0.1% lower from a month ago, driven by lower non-fuel prices. In annual terms, prices were 10.7% lower in September, which has been the 14th consecutive month of decline. Generally, lower import prices of goods suggest lower rates of consumer inflation and a lesser probability of a rate hike.
Prices of exported goods from the United States probably decreased for a fifth consecutive month in October, going down at a monthly rate of 0.1%. In September export prices were 0.7% lower from a month ago, as agricultural prices went down 1.1%, while prices of non-agricultural goods fell 0.6%. In annual terms, export prices slumped 7.4% in September, or for a 13th month in a row. Lower prices of exported goods generally bolster demand abroad, and as US trade accounts for 20% of international trade relations, this also tends to be dollar positive.
The Department of Labor is expected to release the official numbers at 13:30 GMT.
Bond Yield Spread
The yield on New Zealand’s 2-year government bonds went as high as 2.660% on November 9th, or the highest level since August 19th (2.670%), after which it slid to 2.645% at the close to add 6.5 basis points (0.065 percentage point) compared to November 6th.
The yield on US 2-year government bonds climbed as high as 0.910% on November 9th, after which it closed at 0.890% to remain unchanged compared to November 6th.
The spread between 2-year New Zealand and 2-year US bond yields, which reflects the flow of funds in a short term, expanded to 1.755% on November 9th from 1.690% on November 6th. The November 9th yield spread has been the highest one since November 5th, when the difference was 1.770%.
Meanwhile, the yield on New Zealand’s 10-year government bonds soared as high as 3.510% on November 9th, or the highest level since July 17th (3.515%), after which it slid to 3.495% at the close to appreciate 10.5 basis points (0.105 percentage point) compared to November 6th, while marking a fourth gain in the past six trading days.
The yield on US 10-year government bonds climbed as high as 2.377% on November 9th, or the highest level since July 21st (2.403%), after which it slipped to 2.345% at the close to add 2 basis points (0.02 percentage point) compared to November 6th, while marking a sixth consecutive trading day of gains.
The spread between 10-year New Zealand and 10-year US bond yields widened to 1.150% on November 9th from 1.065% on November 6th. The November 9th yield difference has been the most notable one since November 5th, when the spread was 1.174%.
Daily and Weekly Pivot Levels
By employing the Camarilla calculation method, the daily pivot levels for NZD/USD are presented as follows:
R1 – 0.6538
R2 – 0.6544
R3 (range resistance) – 0.6551
R4 (range breakout) – 0.6568
S1 – 0.6526
S2 – 0.6520
S3 (range support) – 0.6514
S4 (range breakout) – 0.6496
By using the traditional method of calculation, the weekly pivot levels for NZD/USD are presented as follows:
Central Pivot Point – 0.6604
R1 – 0.6712
R2 – 0.6901
R3 – 0.7009
S1 – 0.6415
S2 – 0.6307
S3 – 0.6118