Here’s a look at the day’s key fundamental releases, and their likely impact on the global currency markets.
US Pending Home Sales (MoM)
The day’s headliner is unquestionably the latest US pending home sales figure. US data is very much in the spotlight at the moment, with traders and investors trying to gauge the potential timeline of a rate hike. The figure comes as the first of a whole host of real market movers this week, so expect any sort of expectations differential to a) impact the value of the USD and b) offer early insight into the tone of the week.
Consensus forecasts the figure at 1.0% growth, an improvement overt he previous release of -0.8%. With this in mind, look for an improvement on the 1% to strengthen the USD versus its major counterparts and, conversely, a disappointment to weaken the greenback.
New Zealand Trade Balance (YoY)
The next big release of the day comes after the US markets close: the New Zealand trade balance data. This release is important because the Reserve Bank of New Zealand (RBNZ) has been particularly aggressive with its monetary policy over the past couple of months, raising rates in March and once again in April. Now at 3.00%, the market expects further raises across the coming months, and will look to headline releases like the trade balance figure to bolster any argument for these releases.
A higher than expected figure will reinforce the RBNZ’s opinion that the New Zealand economy is expanding, and support a near term rate hike. Conversely, a lower than expected figure may spark fears that the interest rate is being raised too far, too soon, and may dampen expectations of such aggression going forward.
Consensus forecasts the figure at 920M, so look for a release <920M to weaken the NZD versus its major counterparts and a release >920M to strengthen the currency.
To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com