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The NZ dollar jumps higher against the USD.

Written by Sam Coxhead on September 14th, 2012.      0 comments

1:36 PM (NZT)
A surprisingly positive run of events has seen the NZ dollar materially outpace the US dollar this week. The US dollar has seen pressure across the board, as the increasing expectations for the FED monetary policy were priced in by the market. Chairman Bernanke has certainly delivered in the form of open ended quantitative easing measures, in a determined message to the market. Whilst the RBNZ monetary policy decision was benign as expected, latent demand returned to the NZD in the hours following the statement. The pair seems to have found some resistance at current levels (.8320), but given the current momentum, further gains cannot be ruled out in the short term. Global economic fundamentals will again come into focus  once this post FED announcement enthusiasm runs its course, and this will likely see profit taking emerge and the US dollar recover some of its lost ground. None the less the pair has certainly moved to a new range, with upper levels yet to be clearly defined
Of note:
The last week or so has produced a raft of positives to increase risk appetite. Bundled together these somewhat surprising outcomes have seen a dramatic boost in investor confidence, at least in the short term, and this has been of benefit to the AUD and NZD. Equity and commodity markets have reacted very positively to this string of events as well. However, globally the economic data in the coming months is likely to remain vulnerable and this will provide ongoing volatility in currency markets, as these measures work their way through into the real economy.
The current interbank midrate is:                                                            NZDUSD .8339 
The interbank range so far this week to date has been:                 NZDUSD .8075 - .8341
Topics: NZD USD