Currency Market Analysis

Global Themes

NZD

Strong Chinese data supports Kiwi

NZD/USD remains poised on the .7300 mark

After drifting lower earlier in the day yesterday, some late afternoon data from China has helped the NZD/USD rebound back to the .7300 level. It has however failed to sustain any breaks above this level all week.

GDP growth figures for the world's second largest economy in 2017 were released showing a solid 6.9% annual growth rate. A slight improvement on the previous year's 6.7%, but more importantly the first time it has shown an increase in year on year growth since 2010. China is a key trading partner for NZ and Australia so the numbers bode well for a good start to 2018.

Aussie jobs surge but wages remain subdued

NZD/AUD remains in low .9100s

Australia unemployment data released yesterday showed around 35,000 jobs were added in December, meaning that it was the first time jobs had increased every month in a calendar year since recording started back in 1978. Whilst this is very positive the lagging wage growth remains a concern. In theory with the unemployment rate around 5% there should be wage inflation so it will be interesting to see if we get some this year.

NZD/JPY in one cross importers could consider taking advantage of as it is hangs around the favorable 81.00 level.

NZ business manufacturing to end week

Data due out at 10.30 am

Outside of the local manufacturing data we have UK retail sales overnight. Looking ahead to next week some key data out will be NZ inflation, UK unemployment and US GDP growth data.