Earlier this week we highlighted the beneficial effect that the announcement of the change in the Chinese one-child policy had on the Kiwi. Unfortunately, that did not last very long. Yesterday saw the double whammy of two sets of statistics that showed a markedly deteriorating economic situation for New Zealand. Firstly, figures from Fonterra, the large dairy co-op, showed that dairy prices have fallen by 7.4% over the last two months, as against rises in the price for the four months prior to that. Dairy products make up a very significant proportion of NZ exports.
But worse was to come. The quarterly report on employment which came out yesterday showed that unemployment has risen again, for the fourth such report, to where there is now fear that it could be approaching 7%.
As can be seen from the chart above, the NZDUSD pair has now come to rest on the 200 period Exponential Moving Average (EMA) on the four hour chart. And the long-term trend is down, as signified by the appearance of lower highs and lower lows on the same chart.
Bankers under scrutiny both sides of the Atlantic today
As expected, Mario Draghi does not seem to have made any market moving contributions during his welcoming address at the opening of the European Cultural Days event last evening, although Reuters is reporting this morning that the ECB president yesterday reiterated that the governing council will review the degree of monetary stimulus they have deployed when they meet in December, and remain willing and able to act if needed.
Today he gives the welcome address at the ECB Forum on Banking Supervision in Frankfurt, while over in the US, Janet Yellen, Chair of the Federal Reserve, is due before the Committee on Financial Services of the US House of Representatives in Washington, to be questioned on banking supervision and regulation. So bankers are the subject of scrutiny on both sides of the pond today.