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The NZ dollar gives back ground against the AUD.

Written by Sam Coxhead on October 12th, 2012.      0 comments

12:58 PM (NZT) It has been an interesting week for this pair as the NZ dollar gave up some of its impressive recent gains. The sharpest fall came following the materially stronger than expected Australian employment numbers. This has eased back expectations for easing in excess of another 25pts from the RBA before the end of the year. At the same time, it appears that the lower of prospects in Asia and Australia has slightly undermined the demand for the NZ dollar and raised the question of a potential easing in New Zealand if things continue to soften. It seems unlikely at this stage, but should be kept in mind. Once the pair consolidated through the .8000 (1.2500) level, the way was opened for further underperformance from the NZ dollar. It seems that further NZD depreciation through the .7950 (1.2580) level will prove a hard move to make than the initial softness. Assuming that the expectations for the monetary policy do not change dramatically in the short term, current levels off reasonably fair value for this pair.
The current interbank midrate is:                                                            NZDAUD .7960                            AUDNZD 1.2562
The interbank range so far this week to date has been:                 NZDAUD .7942 - .8053             AUDNZD  1.2478 - 1.2591
Topics: NZD AUD