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Oil falls and inspires a little USD strength, NZD bought on profit taking

Written by Sam Coxhead on March 9th, 2011.      0 comments

1:45 PM (NZT) Overnight has seen the oil price retreat a little and this gave the USD some reprieve. OPEC issued a statement declaring that oil production can be increased  as Libyan production grinds to a halt. Along with the gains seen by the USD, the equity markets reacted positively and gold was sold. With reports that protesting in Iran has been quelled with tear gas, there is a good chance that this dip in the oil price will be short lived.
Interestingly the NZD has also taken back a little ground on most cross rates. A large buy NZD sell AUD from out of London has given the NZD a broad based boost. This type of profit taking ahead of the RBNZ meeting tomorrow is not uncommon. The interest rate market has seen a slight reduction in the probability of the 50pt cut from Dr Bollard from a 50% chance yesterday morning down to a around 25% chance today. A cut of 25pts is all but a done deal.
Australian Home Loans numbers just released showed a 4.5% decrease for the month. This has seen the AUD soften marginally since the release but expect moves to be fairly muted ahead of the Employment numbers tomorrow. The expectation is that 21.5k of jobs growth and an unemployment rate stable at 5.0%
European peripheral member debt is once again in the spotlight as yields more quickly higher and S&P yesterday issued a statement that EZ member credit ratings were once again being focused on and it is probable further downgrade’s will occur.
    Last 24 hours trade
  Current level Low High
NZD/USD 0.7290 0.7367 0.7418
AUD/USD 1.0073 1.0054 1.0135
NZD/AUD 0.7335 0.7287 0.7342
AUD/NZD 1.3633 1.3621 1.3723
NZD/GBP 0.4575 0.4550 0.4586
NZD/EUR 0.5323 0.5272 0.5330
NZD/JPY 61.25 60.61 61.32
NZD/CAD 0.7177 0.7173 0.7223