During the overnight hours this evening, Chinese economic information is slated to come forth, something which tends to effect Antipodean currency types, including New Zealand and Australian Dollars, primarily because each nation relies heavily on exports headed to China, thus a decline in China’s economic fortunes can have a nearly-immediate impact.
During tomorrow’s evening hours, we should have news capable of effecting anyone interested in exchange rates of New Zealand’s Dollars, and that country’s interest rate decision should come at roughly 22:00 pm in the UK, with the RBNZ press conference to come quickly afterwards.
While adjustments in New Zealand’s interest rate are not expected, the commentary from the press conference that follows may prove pivotal. Increases in interest rates are thought to be generally positive for the relevant currency at issue, and cuts are typically thought to be indicative of a negative trend in movement. Because markets are highly responsive to rumours in addition to concrete facts, even rumblings that a rate change is imminent can produce movements in currencies, despite nothing having happened yet.
The Pound as well as the UK’s economy in general may experience movement on Thursday as the industrial production and manufacturing data will be released at 9:30 a.m., with the NIESR estimate of growth to follow hours later. Investors pay attention to the growth estimate, since it is routinely quite close to the actual level of growth and thus the Pound can be accurately responsive to what is stated. Thursday at 13:00 p.m. is the anticipated time of release for the National Institute of Social and Economic Research estimate of growth.
My honest impression is that the Pound is currently undervalued and that a strong showing for Sterling can properly be expected, though there does need to be a spark to this upward movement, which makes this week’s economic data quite important.