Poor Japanese Exports Could Hurt NZD USD

The NZD USD is facing similar issues as the Australian Dollar. With the economy showing signs of weakness, investors know the Reserve Bank of New Zealand has to take action to prevent the on-going recession from deepening and widening. Most traders are calling for quantitative easing or an intervention as the best short-term solution. The RBA may cut rates again since they have room to do so, but the speed of the decline in the economy will most likely counter-act a slow-moving interest rate reduction.

The New Zealand economy is reliant on exports, but the recent rise in the Kiwi caused by traders chasing higher yields, have made New Zealand goods too expensive. Furthermore, news that both China’s and Japan’s exports were down is also an indication that demand for New Zealand goods will fall. The future does not look too bright for the New Zealand economy but things could turn around if China announces another stimulus plan.

The NZD USD is facing similar issues as the Australian Dollar. With the economy showing signs of weakness, investors know the Reserve Bank of New Zealand has to take action to prevent the on-going recession from deepening and widening. Most traders are calling for quantitative easing or an intervention as the best short-term solution. The RBA may cut rates again since they have room to do so, but the speed of the decline in the economy will most likely counter-act a slow-moving interest rate reduction.

The New Zealand economy is reliant on exports, but the recent rise in the Kiwi caused by traders chasing higher yields, have made New Zealand goods too expensive. Furthermore, news that both China’s and Japan’s exports were down is also an indication that demand for New Zealand goods will fall. The future does not look too bright for the New Zealand economy but things could turn around if China announces another stimulus plan.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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