Market News

Wild weekend for Kiwi dollar

11 October, 2010

The Kiwi has traded through a 1.5 cent range over the weekend, tumbling down as far as .7950 vs. the USD on Friday night, only to recover all of its lost ground last night.

The initial sell-off on Friday night was triggered by month end portfolio flows, with the Kiwi having fallen 6% during May, some funds reduced their weightings of NZ dollars. This was followed by weak employment data from the Eurozone, where unemployment rose to 12.2% with over 19 million people out of work. This moved the markets into risk off mode and when the NZDJPY rate tumbled below 80.00, stop loss orders were triggered in the speculative trades. All of this combined, to crush the NZD and exporters finally got some very attractive levels to hedge at across most currencies.

However, last night the US reported weaker than expected manufacturing data which saw the market jump back to Fed printing and sparked a 1.5 cent rise in the Kiwi, which starts the day back at the levels we left it at on Friday afternoon.

The weekend’s wild trading range highlights the need for exporters in particular to place orders below the market to take advantage of the dip. The sell-off against the likes of the Euro and the Pound offered super value for exporters as the contrast in economic outlooks could not be any clearer.

Against the Aussie dollar, the Kiwi has stayed down after Friday night’s sell-off as the market expects no change from the Australian Reserve Bank when they review interest rates at 4.30pm today. We expect more rate cuts over the coming months, but the recent sell-off in the AUD might be enough to see market consensus be correct today.

NZD Crosses
NZDUSD 
Rate  0.8049
Change  0.0013
% Change 0.16%

NZDAUD 
Rate  0.8248
Change  0.0071
% Change 0.85%

NZDEUR 
Rate  0.6158
Change  0.0007
% Change 0.11%

NZDJPY 
Rate  80.09
Change  0.86
% Change 1.06%

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NZDGBP 
Rate  0.5254
Change  0.0025
% Change 0.47%

Majors 

EURUSD 
Rate  1.3016
Change  0.0030
% Change 0.23%

USDJPY 
Rate  99.10
Change  1.18
% Change 1.17%

AUDUSD 
Rate  0.9718
Change  0.0095
% Change 0.98%

Foreign
Interest Rates 

USD  0.25%
AUD  2.75%
GBP  0.50%
EUR  0.50%
JPY  0.10%
NZD  2.50%

Other Rates 

NZDCNY  4.9348
NZDHKD  6.2475
NZDFJD  1.4634
NZDCAD  0.8271
NZDSGD  1.0080
NZDXPF  73.49
NZDTHB  24.38
NZDZAR  7.8463
NZDDKK  4.5803
NZDSEK  5.2561

90 Day Bill  2.65%


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