2016-11-03 13:13:44

The pair NZD/USD has sharply grown over the past three days, due to the rise in the world prices of dairy products up to the level of 0.7300, or by 150 points above the closing price of the previous month.

Dairy products auction, which took place two days ago showed significant growth in the world prices of the dairy products

According to the Global Dairy Trade, price index for dairy products was at the level of 11.4% (against +1.4% a month ago). The main item of the country's exports is the milk powder. The rise in the price of the dairy products has positive impact on the New Zealand currency.

Positive data on the employment rate in Q3 and the increase in the 2-year inflation forecast from 1.65% to 1.7% also had favorable effect on the price of the New Zealand dollar.

According to the data released yesterday, unemployment rate in New Zealand fell by 0.1% to 4.9%.

Price index for raw materials issued by the RBA earlier this week, which is a leading indicator showing changes in the prices of exports, has grown by 16% in October on annual basis.

Changes to the export prices have impact on the GDP and exchange rate of the countries, which economies depends on the commodity exports. New Zealand’s economy is focused on exports and the most important item of exports is the milk powder and the other dairy products.

Although interest rates in New Zealand can be lowered soon, they are relatively high, at the level of 2%, which is one of the highest levels among the countries with advanced economies. This fact encourages investors to buy New Zealand currency.

Positive New Zealand’s statistics reduce chances of the interest rate cut by the Reserve Bank of New Zealand in November (meeting of the RBNZ is scheduled for November 9) and the first 6 months of 2017. New Zealand dollar is in a steady uptrend.

Today’s news will include:

At 15:30 (GMT+3): interest rate decisions by the Bank of England and the US Fed.

At 15:30: US labor market data: number of initial applications for unemployment benefits for the last week. The forecast is 258 000 and the previous number was 258 000.

At 16:45: Markit index of business activity in the US service sector for October.

At 17:00: ISM index of business activity in the US service sector for October and industrial orders in September, which is an important indicator of the economic state.

If statistics turn out to be weaker than the forecast, the pair NZD/USD will go up.

Otherwise, the USD will quickly regain lost positions.NZD/USD: the price of milk powder has grown.  Fundamental analysis for 03/11/2016