30 Oct 2013
NZD/USD slightly upwards ahead of FOMC, RBNZ
FXstreet.com (Athens) – The NZD/USDhas been trading softly upwards since the kick-off of the European trading session ahead of the two big day events today pertaining to the cross, the FOMC, RBNZ meetings.
The NZD/USD has managed to make a solid bounce off its recent lows (0.8240) since the early start of the European trading session, ahead of the two critical conferences regarding the pair, the FOMC and the RBNZ. Earlier, the kiwi was only temporarily wounded on news that “Moody’s had considered stripping New Zealand of their AAA credit rating but finally opted not to do so.” Therefore, as soon as the news indicated that that scenario will not happen, the kiwi rebounded abruptly from its low of 0.8212, to hover now around 0.8283 area. Regarding the kiwi, the RBNZ will probably might not be much hawkish on the today’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 and maybe more important, RBNZ Governor Wheeler will probably state that the expensive New Zealand dollar has strong disinflationary affects, so tightening can be delayed further. All in all, 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 start tapering on March 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.”
The NZD/USD has managed to make a solid bounce off its recent lows (0.8240) since the early start of the European trading session, ahead of the two critical conferences regarding the pair, the FOMC and the RBNZ. Earlier, the kiwi was only temporarily wounded on news that “Moody’s had considered stripping New Zealand of their AAA credit rating but finally opted not to do so.” Therefore, as soon as the news indicated that that scenario will not happen, the kiwi rebounded abruptly from its low of 0.8212, to hover now around 0.8283 area. Regarding the kiwi, the RBNZ will probably might not be much hawkish on the today’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 and maybe more important, RBNZ Governor Wheeler will probably state that the expensive New Zealand dollar has strong disinflationary affects, so tightening can be delayed further. All in all, 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 start tapering on March 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.”