On Tuesday, 18th of December at 12:00 am GMT ANZ Business Confidence index value will be published by ANZ Bank New Zealand, which may have significant impact on trend and volatility of New Zeeland Dollar (NZD) and related currency pairs – main (NZDUSD) and crosses (EURNZD, for example). Publication of the index is considered as a high impact event on Forex market as it’s value indicates New Zeeland economic health. Companies are always very sensitive to any market and economic changes and their sentiment may reflect future investment changes on an early stage.
Business Confidence index, released by ANZ Bank New Zealand, is essentially a measurement of how much Australia and New Zealand companies (manufacturers, builders, retailers, agricultural firms and service providers) are confident about future state of their business and economy overall. It is estimated based on a monthly survey of about 1,500 companies which rate the year ahead economic outlook. The net index is calculated by subtracting the percentage number of businesses that expect that the economic situation improves from the number that expect decline. Positive value states for optimism, opposite indicates pessimism.
Since currency rates have already accounted for the current value of the index, we consider that the change of the index is more interesting and useful than its absolute value. Thus, we provide a couple of statistical insights related to ANZ Business Confidence change in the past.
Below is the distribution of the absolute change. In other words, the graph shows how many times the change was positive or negative, or even absent.
It is also interesting to check how large was the change in price depending on the index change. Below you can check 4 graphs that represent the change of the NZDUSD rate at the close of the 1st 1-minute, 5-minute, 30-minute and 1-hour bar after the news release.
For some breakout strategies it can be useful to check maximum price level (high) that NZDUSD has reached during 1st 1-minute, 5-minute, 30-minute and 1-hour bar after the news release.
And minimum price level (low) as well.
News based trading may be very profitable if you have enough data to evaluate your model properly and if know what to expect. Should you be interested in developing a News Indicator or a Trading Bot for your preferred trading platform – please, feel free to contact us.