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23 May 2013
Flash: Momentum and technicals now conspiring against NZD – BNZ
FXstreet.com (Barcelona) - After smoothing through a bit of volatility, which saw the NZD/USD briefly propelled to 0.8200, the market response has generally been to take US bond yields and the USD higher.
US equity markets, meanwhile, have spat the dummy, declining 0.7-1.4%. This scuttling of investors’ risk appetite has amplified the selling pressure on the ‘high-beta’ AUD, CAD, and NZD. As a result, the ‘commodity currencies’ fill out the bottom three places in the overnight currency performance rankings (with the NZD at the bottom).
According to the BNZ Research Team, “For today, we expect the NZD/USD to remain heavy as the market digests last night’s more hawkish Fed rhetoric. Exporter hedging demand may provide a boot to the currency, but bounces should be limited to around 0.8120. A convincing break below key support at 0.8060 would pave the way for a deeper correction towards 0.7920.”
US equity markets, meanwhile, have spat the dummy, declining 0.7-1.4%. This scuttling of investors’ risk appetite has amplified the selling pressure on the ‘high-beta’ AUD, CAD, and NZD. As a result, the ‘commodity currencies’ fill out the bottom three places in the overnight currency performance rankings (with the NZD at the bottom).
According to the BNZ Research Team, “For today, we expect the NZD/USD to remain heavy as the market digests last night’s more hawkish Fed rhetoric. Exporter hedging demand may provide a boot to the currency, but bounces should be limited to around 0.8120. A convincing break below key support at 0.8060 would pave the way for a deeper correction towards 0.7920.”