2 Dec 2014
NZD/USD established in a 1.5 cent range, Fonterra GDT eyed
FXStreet (Bali) - NZD/USD exhibited an improved bid tone outside Asian hours, with the rate rebounding vigorously off a low at 0.7777, reaching 0.7912 by NY close before a gentle pullback settled the price around 0.7865/70 ahead of Tokyo.
The major reversals seen in the commodity/energy space proved NZD-supportive, as it was the regular supply in AUD/NZD after breaking another key level below 1.08. The main driver for the Kiwi today will be the RBA monetary policy decision, with the Kiwi to follow AUD's tail, while another Fonterra GDT auction later on the day is also key.
Technically, NZD/USD shows inconclusive price action, with swings in the last 2 weeks finding committed buyers/sellers above 0.79 and below 0.78, as the market awaits the next big catalyst for the pair. This may come via a further deterioration in Fonterra's GDT, a potential downgrade in milk cash payouts to farmers for 2015 by Fonterra, a more aggressive over-valuation rhetoric by the RBNZ or a return of the USD broad-based strength theme, despite the NZD has been very resilient to give too much ground even as the USD demand was kept solid in the last few weeks. Another scenario, although not to be ruled out, is that the market starts to price in further delays in the Fed's tightening campaign as the global inflation outlook worsens.
The major reversals seen in the commodity/energy space proved NZD-supportive, as it was the regular supply in AUD/NZD after breaking another key level below 1.08. The main driver for the Kiwi today will be the RBA monetary policy decision, with the Kiwi to follow AUD's tail, while another Fonterra GDT auction later on the day is also key.
Technically, NZD/USD shows inconclusive price action, with swings in the last 2 weeks finding committed buyers/sellers above 0.79 and below 0.78, as the market awaits the next big catalyst for the pair. This may come via a further deterioration in Fonterra's GDT, a potential downgrade in milk cash payouts to farmers for 2015 by Fonterra, a more aggressive over-valuation rhetoric by the RBNZ or a return of the USD broad-based strength theme, despite the NZD has been very resilient to give too much ground even as the USD demand was kept solid in the last few weeks. Another scenario, although not to be ruled out, is that the market starts to price in further delays in the Fed's tightening campaign as the global inflation outlook worsens.