Get a free Quote

From CCY
please type the characters you see:
(spam filter)
spam control image

Apply now

Obligation free account and currency commentary btn_apply_for.gif
Browse By Topic

FX News

Most recent FX News:

Read more

Why has the NZD lost ground to the US dollar this week?

Written by Sam Coxhead on November 18th, 2011.      0 comments

4:04 PM (NZT) The NZD opened higher against the USD on Monday after the positive news in Italy that the austerity budget had been passed and new leadership was poised to take over. However the positive sentiment did not last long and the downward bias resumed at quite a clip. Illustrating the extent of which the European debt crisis is driving the price action is the fact that the much better than expected retail sales numbers for the 3rd quarter in NZ had almost no impact on the pricing. For the time being the focus is almost completely on the negative impacts of the debt issues. The interest rate market in NZ has reacted to the latest developments by starting to price the chances of cash rate cuts from the RBNZ. A potentially lower cash rate in NZ will certainly mean a lower NZ dollar over time. To what extent the interest rate market pushes for a lower cash rate remains to be seen. With the US diverging from a weaker Europe, and Asian growth holding up for the time being, a cut to the cash rate seems unlikely at this stage. Helping the NZD to weaken , whilst also pushing interest lower, is the rolling off of 8.8 billion of November 2011 NZ government bonds. This is large in terms of the NZ market and weighs on the NZD as not all maturing funds are reinvested. The bias remains to the downside for the NZDUSD pair, but the possibility of sharp relief rallies higher should counter outright enthusiasm for lower, as was evidence a couple of weeks ago.
The current interbank midrate is:                                                            NZDUSD .7583
The interbank range so far this week to date has been:                 NZDUSD .7564 - .7928