The past two weeks have seen NZD/USD rangebound with a slight downward drift. The forces shaping this result have been continuing good NZ economic news (retail spending, housing market, employment), offset by good US economic news (retail spending, GDP, employment). Charts 2 and 3 show both the NZD and USD currencies have been supported recently by positive economic momentum, with the USD only slightly dominant.
This week may see more of this ranging. NZ economic data has downside risks, but so too does the US data. NZ terms of trade (Mon) will fall, and the semi-monthly dairy auction (Wed) will be watched for signs of a bottom. US data (ISM surveys, payrolls) may be cold-weather affected and thus disappoint. That leaves us with a neutral bias for the week ahead.
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