The quite (and snowy!) Monday is going to be followed by a bunch of economic indicator releases and central bank announcements this week that could have a role in currency pairs dance moves. So what’s up in the economic calendar this week?
ANZ Business Confidence – Tuesday 1 AM GMT
The ANZ Index is a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
New Zealand economy is projected accelerate from 3% to 3.8% by mid-2016. This could be the reason why that the Reserve Bank of New Zealand (RBNZ) isn’t seen to be likely to ease monetary police with rate cuts or bond purchases even though inflation is likely to stay below the target 1% to 3% range for the foreseeable future.
Despite this, as I analyzed on Friday, Mr. Kiwi’s current value being viewed as “unjustifiably high and unsustainable,” so we could see drops in Kiwi crosses within the next few policy meetings, where the gang might attempt to get the New Zealand dollar down to more sustainable levels for their export economy to thrive.
Other than this, we also have the GDT (Global Dairy Trade) price index out of New Zealand on Wednesday, which is the weighted-average price of the 9 dairy products sold at auction are sampled and then compared to the previous sampling. This could also trigger some moves for Mr. Kiwi as it is a leading indicator of the nation’s trade balance with other countries because rising commodity prices boost export income.
Canada’s GDP – Tuesday 1:30 PM GMT
Canada release their GDP on a monthly basis to show their economic activity. Their economy expanded by 0.3% in December, exceeding analysts’ expectations for a 0.2% gain. However this time the monthly GDP is expected to be on the weak side, as oil price slump seems to be taking its toll on poor Mr. Canadian dollar, despite the fact that Canada managed to print a stronger than expected employment change reading for February.
Many analysts believe Canada could be in for a world of pain due to the oil price slump that started last year.
Alberta, which relies mostly on its energy and natural resources sector, has suffered 14,000 in job losses for the month, pushing its unemployment rate up to its highest level since September 2011. In fact, the economy lost roughly 16,900 positions related to mining, oil, and gas.
The value of Canadian dollar has been consolidating around a 6 year low versus the US dollar and it could remain this way this month, with slight fluctuations between the level of our pivot zone: 1.23800 and 1.27900.
A worse than expected GDP release can push the USD/CAD pair up to the upper pivot level of 1.27900 and a stronger bullish sentiment could bring us to a new bullish target of 1.300.
The alternative bearish scenario (although unlikely) is seeing sudden weakness in the US economy/ strength in the Canadian economy which would change our outlook below the pivot level with the 23% Fibonacci at 1.203 as first target.
More on the Economic Calendar
Looking further down the calendar, we get UK and European PMI indicators, which always cause a bit of volatility. We’re also in the last couple of days of month, quarter and year end for businesses and asset managers, as such there will be a lot of real money moves in the market as people square their positions off. Towards the end of the week we start to see US employment data and then non-farm payrolls on Friday.
Stay tuned right here for further updates!