NZD rallied in the Asian session, fuelled by brilliant Q2 performance. Besides the dollar index was muted.
Elsewhere, Silver and Copper outperformed by 0.50% each and Gold up 0.15% respectively.
NZD: The kiwi dollar rallied 50 points this morning as New Zealand economy growth surprise the market.
The latest GDP figures released at 1.0% beats the economist forecast 0.8%. Gross domestic product (GDP) provides a snapshot of the performance of the economy. GDP is New Zealand’s official measure of economic growth.
According to Stats NZ, Economic activity, as measured by gross domestic product (GDP), was up 1.0 percent in the June 2018 quarter. This rise follows a 0.5 percent increase in the March 2018 quarter.
We understand this is the largest broad-based growth in two years.
“Growth was broad-based, with 15 of 16 industries recording higher production. Mining was the only industry to decline, reflecting one-off factors” Stats NZ said today.
“Once again service industries led growth. Goods-producing and primary industries also saw rises this quarter,” national accounts senior manager Susan Hollows said.
We see few important Central Bank policy meetings includes Swiss Nation Bank and Norges Bank.
We expect SNB to remain on hold, whereas the Norges Bank is likely to deliver the first rate hike in seven years from 0.50% to 0.75%.
With the recent NOK strength, we believe this week’s rate hike is nearly priced in, but further NOK appreciation will be available if the Norges bank hints the second hike in December 2018.
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“We expect the bank’s forecast path to steepen somewhat, especially for 2020 and 2021. In particular, we expect about an 8bp upward revision to the projected rate for year-end 2020 and about 12bp for year-end 2021” Barclays reported in the weekly note.
Data wise, there are no market moves for the euro and US dollar today. Elsewhere UK Retail sales grab the attention. We expect UK retail sales set to fall in August. We expect a contraction to 0.0% or even into negative territory. Back in July, retail sales increased by 0.7% from a decrease of 0.5% in June.
Chart of the day: GBPCHF
As long as 1.2600 is support look for 1.2770 and 1.2890.
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