Forex Outlook: NZD Extends Declines against Most Majors

on Nov 14, 2012
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**New Zealand Dollar Falls Versus USD, EUR, JPY and AUD**

In early trading today, the New Zealand dollar extended Tuesday’s declines against most of its major trading peers. The kiwi fell to a 2-day low of 0.8146 against the greenback (USD). Versus the euro (EUR), NZD hit 1.5649 — its lowest level since November 9 — while against the yen (JPY), the kiwi fell to 64.95 from 65.09. The NZ currency also dipped to more than a 2-month low of 1.2813 against the Australian dollar (AUD) from yesterday’s close of 1.2794.

The weak performance followed official figures showing a 0.4 per cent drop in New Zealand’s third-quarter retail sales, compared to a Reuters survey calling for a 0.5 per cent gain. This report added to the gloom from data last week showing the jobless rate in New Zealand unexpectedly jumped to 7.3 per cent, suggesting the economy’s pace is stumbling and the recovery is far from robust.

**NZD/USD Outlook**
After a 35-pip collapse overnight, the NZD/USD has rallied slightly during European trading this morning. The pair has regained its footing and now, as mentioned, trades above the 0.8100 level.
According to FXstreet, citing the ICN.com analyst team, “the NZD/USD is still trading sideways above the 0.8100 level and below the linear regression indicators. The risk is high at the time being as RSI is trading sideways around 45 points signalling the sideways move remains dominant and we will not bet on a direction for now before breaching 0.8100 or returning above 0.8255-60 once again.”

**AUD/NZD Outlook**
Amongst other currency pairs relative to the New Zealand dollar, AUD/NZD is eyed to start trading in more positive territory. As NZ’s poor third-quarter data run continues and increasing optimism over China supports the AUD/USD more than the NZD/USD, forex analysts expect a little more upside near term for the AUD/NZD to 1.2900/30.
**Factors to Watch**
Later today, forex investors should be paying attention to several US data releases, including the Federal Open Market Committee (FOMC) minutes at 19:00 GMT. In New Zealand, the Business PMI at 21:30 GMT stands as the only noteworthy newswire today.

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