29 Oct 2013
NZD/USD downwards due to soft Aussie, expectance of dovish RBNZ
FXstreet.com (Athens) – The NZD/USDhas been trading consistently downwards since the kick off of the Asian trading opening session, as market participants seem to have already priced in an dovish RNBZ meeting on Thursday.
NZD/USD tumbles amidst weaker Aussie and on bets RBNZ will sound more dovish
The NZD/USD has been trading under pressure throughout the Asian trading session, mostly due to two factors. First off all, the kiwi follows the track of its Antipodean counter-part, i.e. the Aussie, but today the Aussie is tumbling across the board as RBA’s Governor Stevens supported that the Australian dollar is unusually high, something that is not supported from fundamentals, therefore it is just a time ‘issue’ to start a downtrend shift. Regarding the kiwi, the RBNZ will probably might not be much hawkish on the Thursday’s meeting, as since the RBNZ introduced the loan to value mortgage restrictions, the weekly housing loans approvals dropped by more than 7%. What’s more, the RBNZ will probably lead to the first rate hike in the April as of 2014, while most of market participants believe that Fed will also start tapering on March as of 2014. All in all, the RBNZ will probably suggest that the introduction of the restrictions on the loan to value mortgage coupled with
the very strong NZD currency, have lessened the need to push up a rate relatively soon. Most economists forecasting that the RBNZ will proceed with first rate hike on April as of 2014.
Technical Perspective of NZD/USD
Westpac Global Strategy Group suggests that “A less hawkish RBNZ on Thursday will probably push market pricing for the first hike from March 2014 to April. The resultant fall in NZ interest rates should in turn push NZD/USD lower. Near term NZD momentum has already flipped to negative, so the downward correction risks extending to 0.8200. Beyond the week ahead, though, we remain constructive on the kiwi, given broad USD weakness and strong NZ fundamentals.”
NZD/USD tumbles amidst weaker Aussie and on bets RBNZ will sound more dovish
The NZD/USD has been trading under pressure throughout the Asian trading session, mostly due to two factors. First off all, the kiwi follows the track of its Antipodean counter-part, i.e. the Aussie, but today the Aussie is tumbling across the board as RBA’s Governor Stevens supported that the Australian dollar is unusually high, something that is not supported from fundamentals, therefore it is just a time ‘issue’ to start a downtrend shift. Regarding the kiwi, the RBNZ will probably might not be much hawkish on the Thursday’s meeting, as since the RBNZ introduced the loan to value mortgage restrictions, the weekly housing loans approvals dropped by more than 7%. What’s more, the RBNZ will probably lead to the first rate hike in the April as of 2014, while most of market participants believe that Fed will also start tapering on March as of 2014. All in all, the RBNZ will probably suggest that the introduction of the restrictions on the loan to value mortgage coupled with
the very strong NZD currency, have lessened the need to push up a rate relatively soon. Most economists forecasting that the RBNZ will proceed with first rate hike on April as of 2014.
Technical Perspective of NZD/USD
Westpac Global Strategy Group suggests that “A less hawkish RBNZ on Thursday will probably push market pricing for the first hike from March 2014 to April. The resultant fall in NZ interest rates should in turn push NZD/USD lower. Near term NZD momentum has already flipped to negative, so the downward correction risks extending to 0.8200. Beyond the week ahead, though, we remain constructive on the kiwi, given broad USD weakness and strong NZ fundamentals.”