20 Aug 2013
NZD/USD extending lossses
FXstreet.com (Barcelona) - NZD/USD is printing lower still, extending the move it had made from 0.8160 to 0.8060 yesterday. The pair is now trading sub 0.7980.
“The RBNZ announced that LVR restrictions on banks will on October 1: “banks will be required to restrict new residential mortgage lending at LVRs of over 80 per cent to no more than 10 percent of the dollar value of their new housing lending flows”. The use of the LVR to dampen the booming housing market had been well flagged and was not a surprise; however, the start date was arguably sooner than expected. Perhaps what’s equally important is Governor Wheeler’s shift back towards a more dovish stance, describing the currency as “overvalued” (vs merely “high” in the July OCR review communiqué), and remarking that “any OCR increases in the near term would risk causing the NZD to appreciate sharply…”. Further, these LVR restrictions “increase the flexibility...in determining the timing and magnitude of future adjustments to interest rates”, suggesting that if these macroprudential tools work, the RBNZ may delay the hiking cycle. We remain comfortable with March 2014 as the first rate hike, but today’s speech has diluted the risk of an earlier move. Separately, the RBNZ households’ 2yr inflation expectation measure rose to 2.36% in Q3 from 2.06%, the first q/q increase since Q2 2011. Not alarming levels yet (still consistent with RBNZ target 1-3%) but it certainly signals higher inflation to come,” said research teams at TD Securities.
NZD/USD heavily offered
NZD/USD is trading with a negative bias with the 20 dma at 0.7990, and the 50 dma is 0.7909 and the 200 dma is 0.8212. RSI (9) reads 59.94. Supports are ascending from 0.7884, 0.7919, 0.7935, and 0.7957. Spot is currently 0.7987 while resistances are 0.8060, 0.8074, 0.8118 and 0.8135.
“The RBNZ announced that LVR restrictions on banks will on October 1: “banks will be required to restrict new residential mortgage lending at LVRs of over 80 per cent to no more than 10 percent of the dollar value of their new housing lending flows”. The use of the LVR to dampen the booming housing market had been well flagged and was not a surprise; however, the start date was arguably sooner than expected. Perhaps what’s equally important is Governor Wheeler’s shift back towards a more dovish stance, describing the currency as “overvalued” (vs merely “high” in the July OCR review communiqué), and remarking that “any OCR increases in the near term would risk causing the NZD to appreciate sharply…”. Further, these LVR restrictions “increase the flexibility...in determining the timing and magnitude of future adjustments to interest rates”, suggesting that if these macroprudential tools work, the RBNZ may delay the hiking cycle. We remain comfortable with March 2014 as the first rate hike, but today’s speech has diluted the risk of an earlier move. Separately, the RBNZ households’ 2yr inflation expectation measure rose to 2.36% in Q3 from 2.06%, the first q/q increase since Q2 2011. Not alarming levels yet (still consistent with RBNZ target 1-3%) but it certainly signals higher inflation to come,” said research teams at TD Securities.
NZD/USD heavily offered
NZD/USD is trading with a negative bias with the 20 dma at 0.7990, and the 50 dma is 0.7909 and the 200 dma is 0.8212. RSI (9) reads 59.94. Supports are ascending from 0.7884, 0.7919, 0.7935, and 0.7957. Spot is currently 0.7987 while resistances are 0.8060, 0.8074, 0.8118 and 0.8135.