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NZD lags in overnight trade

Written by Sam Coxhead on January 19th, 2011.      0 comments

8:29 AM (NZT) The NZD lagged overnight as the EUR, GBP and AUD outperformed.

The CPI released in the UK showing 3.7% YoY added to market hopes that the Bank of England would be forced to raise the cash rate earlier than expected. Obviously this number proved to be GBP positive. Of note is the fact that the market has not been as “short” Pound Sterling as it has EUR of late, so expect to see slow appreciation without participants being forced to exit trades and buy the GBP back in desperation.

The EURO was boosted by a large bounce in economic sentiment that saw a survey jump from 4.3 to 15.4. Adding to the positive tone was an article stating that the Russian Govt interests would once again buy Bonds from European member states. Also there was a report stating that the Chinese were nett sellers of US Bonds in November, and their need to diversify further away from USD into EURO and YEN.

The slow change of currency power away from the USD is a factor that should be that has to be kept in mind with regards to the level of the NZD against the USD.
The Bank of Canada left the cash rate unchanged as expected, but upgraded growth forecasts for 2011/12, and will remained poised to adjust monetary policy were appropriate.
With no Australasian data of significance today, all eyes on NZ CPI tomorrow morning at 10.45am (NZT).
    Last 24 hours trade
  Current level Low High
NZD/USD 0.7709 0.7694 0.7744
AUD/USD 0.9981 0.9898 1.0005
NZD/AUD 0.7725 0.7720 0.7783
AUD/NZD 1.2944 1.2848 1.2953
NZD/GBP 0.4827 0.4811 0.4858
NZD/EUR 0.5765 0.5745 0.5813
NZD/JPY 63.74 63.54 63.87
NZD/CAD 0.7645 0.7598 0.7654