NZD/USD has traded very heavy in past two weeks. NZD/USD analysis

New Zealand
Japan
Singapore

Every asset class has been on a rollercoaster ride as investors are watching central bankers all around globe tighten monetary policy to fight inflation. Financial conditions are starting to tighten and the risks of slower growth are accelerating.

New Zealand

NZ Retail Card Spending has downside risks and the Food Price Index, upside risks this week. The cost of living has become the central issue in New Zealand at the moment and a high FPI will heap pressure on the RBNZ to accelerate rate hikes as the economy starts to show signs of stress elsewhere.

NZD/USD has traded very heavy in past two weeks as investors price in a hard landing and an RBNZ behind the curve, and as risk sentiment sours internationally. NZD/USD is closing at the weeks lows and could test 0.6200 this week.

Japan

Japan releases a raft of second tier data this week. THe 10 and 30-year JGB auctions will be closely watched, if only for signs of poor cover ratio given the BOJ JGB intervention and weakening Yen.

THe centre of attention will remain the USD/JPY as the US/Japan rate differential widens. USD/JPY could well test 135.00 in the week ahead if the negative sentiment sweeping markets on Friday spills into next week. Higher oil prices will also weigh onthe Yen. We expect the noise to increase from Tokyo but little chance of USD/JPY intervention at these levels.

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Singapore

No significant data. The currency remains under pressure as a proxy for China and also because the MAS meets six monthly to determine monetary policy. The next meeting will not be until October to determine if monetary policy gets tightened once again.

Ed Moya

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.