NZD/USD drops on cullen statements

I went ate some lunch and came back to see the NZD/USD dropped almost 100 pips. What up with that. Bad stomach you were hungry at the wrong time LOL

Cullen said no rate hikes until about 2008. Pity I did not check that.

I did not see that on the calander. Such is life. Would have been a good ride

LOL

why is it that everytime the market makes a big move that "wasnt on the calendar" somebody's got to wonder why it wasnt on the calendar?!? LOL

but seriously, we dont cover every speech from every country, that would make the calendar 5 times as big as it is. we do our best, and the guys are getting better with the calendar coverage. if you want EVERY SINGLE speech, event, indicator etc etc you need a good realtime news service. check out tradethenews, i just found out they started some affordable services for forex traders.

Hey, Thanks Merlin

I believe NZD/USD will still go down when Asia and then Europe open. Shorted at 86. After I shorted it went down. Will be fun tonight to enjou ride.

Merlin...

My dog just crapped and it wasn't on the calendar....

LOL

Apparently, Cullen also said that investors should not rule out a decline in the currency to $0.40. I could handle that, considering I just went short on the NZDUSD on the retrace. Too bad I know I won't be able to hold it for that long... I'm looking forward to the Asian and European sessions as well...I think we'll continue to see a sell-off.

Reuters:

* New Zealand dollar falls 1.4 percent after Finance
Minister quoted in London saying he does not think central bank
will raise rates again, and that markets outside of New Zealand
took RBNZ statement as a more hawkish message than was intended.
* Cullen also reported saying medium-term trend for the kiwi
is lower, and there had been an irrational rush into NZ dollar
assets.

Bloomberg report him saying:

Hedge funds appear to be ``taking short-term positions'' in the dollar to take advantage if New Zealand's relatively high interest rates and ``betting they can get out in time and not lose'' when the currency declines, Cullen said yesterday. Investors shouldn't forget the dollar had dropped below 40 U.S. cents in the past and ``would be unwise to bet that that couldn't happen again.''

``Some of the markets outside New Zealand have taken what Alan said as a harder message than was Alan's actual intention,'' Cullen said. ``A lot of that statement was with an eye on the New Zealand domestic scene.'' Rather than signaling rates would rise again, Bollard was saying: ``I haven't got my finger on the trigger but don't forget there is a gun in the drawer.''

That last bit is my favourite...putting words in cbk gvnr Bollards mouth. I'd like to think he ran it by Bollard first, but I doubt he did. Normally, Cullens statements haven't moved the mkt this much, suggesting the NZD may already have been overbought. I am -ive on NZD medium term, but wouldn't be surprised to see some retrace here, just based on past price action and the fact that he isn't RBNZ.

anybody have the full text of his speech? i looked on RBNZ site couldnt find it. here is the breif i got...

(NZ) FINANCE MINISTER: SHARP FALL IN KIWI CAN NOT BE RULED OUT

- hedge funds may be pushing up New Zealand Dolllar.

- investors should not rule of a decline in the currency to 40 US Cents

- does not expect the Reserve Bank to intervene to stem the NZD's gain.

abo do you have a bloomberg terminal?

Hi Merlin, no bloomie at this end, just Reuters and it was really thin on the ground on the speech. I grabbed the Bloomberg quote from the web.

I checked the Finance Ministry and nothing , though this kind of verbal intervention from Cullen is nothing new. There won't be anything on RBNZ site, apart from maybe a picture of Bollard pulling his hair out!

yeah i thought you had Rueters thats why i was funny that you quoted bloomberg.

i agree with ya that cullen is marching off the path and is probably getting himself in trouble at the big bank.

was this a speech he made? or just a comment to a reporter or something?

NZ has high inflation, yet no rate hike?

They must be taking ecnomic slowdown (Trade Balance) heavier than inflation.

Its 0.6611 now, will wait for it to hit 0.6630 (pivot point) to sell.

The dudes been over here in London. He was giving an interview. I bet Cullen harks back to the 'good old days' when the gvt could meddle with monetary policy as it wished. These days '..The Minister is not consulted or even informed of monetary policy decisions until immediately before their public release.' Too right!

LOL yeah sounds like he aint too happy about the new way of doing things!

damn i guess we need to start putting interviews on the calendar

I short nzd/usd at 0.6660. do you think it will go to 0.6500. thanks

probability suggests we will get back to 0.65. Surely the odds must be well over 98%, purely based on the random walk alone.

Caveat - I've assumed an infinite time horizon!