NZD Recovering Faster than Most Currencies
July 14th, 2009 Posted in Analyst Picks
The New Zealand Dollar (NZD) strengthened to a one-week high against the USD following remarks by Reserve Bank (RBNZ) Governor Alan Bollard stating that New Zealand’s economy will recover ahead of most of its trading partners. This statement prompted speculations of interest rate increases in the next 12 months, pushing investors into the NZD.
The NZD recovered from a slide following a report that showed farmers’ confidence declined for the third consecutive time since November as dairy prices slumped. The Kiwi also benefited from the recent rally in global equity markets as traders left the safety of the USD and JPY in favor of higher yielding riskier currencies.
With optimism slowly returning to the markets following some positive earning reports released from the U.S., as well as mostly optimistic domestic data, the NZD is likely to continue its upward trend throughout the week. However, with several important economic indicators due to be released from the U.S. this week, any worse than expected news are likely to bring back risk aversion and reverse the NZD’s current rally.
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