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Attachments: Why is NZD so strong??
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Why is NZD so strong??

  • #81
  • Jun 29, 2007 2:05am Jun 29, 2007 2:05am
So interesting that direction take NZD? I think firs will be short till 0.7560 then I will be happy
  • #82
  • Jun 29, 2007 2:24am Jun 29, 2007 2:24am
Quoting kariunas13
So interesting that direction take NZD? I think firs will be short till 0.7560 then I will be happy


Short 0.7560?? now should be -169 pips?

or u mean the other way round?
  • #83
  • Jun 29, 2007 2:32am Jun 29, 2007 2:32am
I think that will be intervation of NZBD. But I am short this position at 0.7695 and will wait and do second short
  • #84
  • Jun 29, 2007 2:33am Jun 29, 2007 2:33am
And You opinion that You think?
  • #85
  • Jun 29, 2007 2:34am Jun 29, 2007 2:34am
Very strong this level 0.7700-50 strange look for short
  • #86
  • Jun 29, 2007 2:40am Jun 29, 2007 2:40am
maybe some see reverse of NZD. Predict some level 0.70 per month or see some level 0.80 important level
  • #87
  • Edited 12:44pm Jun 29, 2007 12:34pm | Edited 12:44pm
If RBNZ wants to intervene, it should be within the next 30 minutes when NZDUSD is showing some risk aversion, or the 1st 30 minutes come next week opening when RBNZ have the 1st shot at the market. OR:

from DailyFX
Quote
Traders were very wary of intervention after last Friday NY action and rumors overnight that the RBNZ would ask the BOJ to intervene on their behalf, maybe even in NZD/JPY.
I think RBNZ dont have the ammo and is asking the opponent camp to shoot themselves?
  • #88
  • Jun 29, 2007 3:46pm Jun 29, 2007 3:46pm
I have a bad feeling that RBNZ's talk of intervention is nothing more than just "empty talk". Are they really serious to bring NZDUSD down? Or simply did it once and then telling us that they will continue doing so *hoping* we do it for them?

"Hey! RBNZ is checking the prices, lets close our long NZD positions!"
hours later ...
"crap, RBNZ did nothing back there.. oh well buy NZD again (on the dips)!"


This is precisely whats been happening lately. RBNZ is simply lurking around announcing they are checking the prices trying to send jitters amongst traders but no concrete actions.

Now, they are asking BOJ to help intervene for them? Im memroy serves me right, about 7 months ago, Bollard went to Japan complaining about the carry trades... its been uphill climb for NZDUSD/NZDJPY ever since. And NZD added a full 1.00% more interest since then making carry trades even more attractive..
  • #89
  • Jun 29, 2007 4:05pm Jun 29, 2007 4:05pm
Quoting BurgerKing
I have a bad feeling that RBNZ's talk of intervention is nothing more than just "empty talk". Are they really serious to bring NZDUSD down? Or simply did it once and then telling us that they will continue doing so *hoping* we do it for them?

"Hey! RBNZ is checking the prices, lets close our long NZD positions!"
hours later ...
"crap, RBNZ did nothing back there.. oh well buy NZD again (on the dips)!"


This is precisely whats been happening lately. RBNZ is simply lurking around announcing they are checking the prices trying to send jitters amongst traders but no concrete actions.

Now, they are asking BOJ to help intervene for them? Im memroy serves me right, about 7 months ago, Bollard went to Japan complaining about the carry trades... its been uphill climb for NZDUSD/NZDJPY ever since. And NZD added a full 1.00% more interest since then making carry trades even more attractive..
Central Bank is not intervening for nothing. I noticed that RBNZ has intervened when NZD was going up freely.

Today, it was the dollar getting smashed acorss the board. So, NZD went up in tandem with all majors. We might see further intervention if speculative moves are detected, while the rest of the market rests.

I'm "shooting" on the subject here, I'm not a central bank expert. That's what I've noticed only.

Thoughts?
  • #90
  • Jun 29, 2007 4:19pm Jun 29, 2007 4:19pm
Here's what they say they are doing:

Quote
Intervention operates at the margin, affecting the balance of demand and supply for the New Zealand dollar. It can have an immediate downward impact on the exchange rate as it did on 11 June. That can help to moderate the ‘peaks’ in the exchange and the length of time we spend at peak levels. It does not attempt to defend a particular level of the exchange rate. Rather it sends a signal that, in the Bank’s view, the exchange rate is out of alignment with the economic fundamentals. Those speculating in the New Zealand dollar need to be aware that the exchange rate is not a one-way bet; they need to be cautious.

...

The mechanics of foreign exchange market intervention are quite simple. The Reserve Bank acquires foreign currency reserves by selling New Zealand dollars. This activity may be limited by the amount of foreign reserves we are prepared to accumulate; but is not limited by the Bank’s ability to supply NZ dollars. In this sense, intervention to lower the NZ dollar is less restricted than in the reverse situation where intervention is working to support the NZ dollar by running down reserves.

http://www.rbnz.govt.nz/speeches/3049397.html
  • #91
  • Jun 29, 2007 4:25pm Jun 29, 2007 4:25pm
Quoting cesarnc
Central Bank is not intervening for nothing. I noticed that RBNZ has intervened when NZD was going up freely.

Today, it was the dollar getting smashed acorss the board. So, NZD went up in tandem with all majors. We might see further intervention if speculative moves are detected, while the rest of the market rests.

I'm "shooting" on the subject here, I'm not a central bank expert. That's what I've noticed only.

Thoughts?
USD may have weakened causing NZDUSD to go up. But whats driving NZD up in the first place is the strong demand with NZDJPY.

IF the NZDUSD rise was solely from USD weakness, then NZDJPY should be flat.. but NZDJPY is upward suggesting NZDJPY is pulling it up.
  • #92
  • Jul 2, 2007 3:10pm Jul 2, 2007 3:10pm
Where are our friends from the Central Bank?
  • #93
  • Jul 2, 2007 7:49pm Jul 2, 2007 7:49pm
Wednesday's NY session will be really thin for price moving.
  • #94
  • Jul 2, 2007 8:37pm Jul 2, 2007 8:37pm
Look at NZD/JPY chart at yearly, monthly, 4h, hourly and it seems reasonable to short now to reap 50-70 pips in next 24 hours. That is a higher probability play that going long at this point. I am short at 95.77.
  • #95
  • Jul 2, 2007 8:55pm Jul 2, 2007 8:55pm
Quoting radiolog
Look at NZD/JPY chart at yearly, monthly, 4h, hourly and it seems reasonable to short now to reap 50-70 pips in next 24 hours. That is a higher probability play that going long at this point. I am short at 95.77.
I agree with the idea BUT, for a pair to be overbough or oversold it doesn't mean it can not be more overbough or oversold .

The JAP and US pairs are getting the kick for a long time now and might continue to do that for while at least a month , the news and the trend are in fav of the EU GB zone.

lately there has been some gossip about the carry trades and the strong possible reversal on the jap pairs, that supports your idea, BUT these days its better to wait for a confirmation ( News , or trend reversal ) before taking a trade, after all we are taking about 100s of pips if this happen
  • #96
  • Jul 2, 2007 9:31pm Jul 2, 2007 9:31pm
Here's a report:

Tue, Jul 3 2007, 02:00 GMT
USD continues to fall over mortgage concerns
Quote
NZD posts fresh highs (again). The NZD continued to grind higher during yesterday’s local session peaking at a fresh high of 0.7759 with no data to give it any real direction. From the opening of the offshore session the NZD began to find some real momentum as it surged through 0.7800 on its way up to another 25 year high of 0.7835. With the market currently pricing in a 34% chance of another interest rate hike when the RBNZ meet on 26 July, investors have signalled that this risk is still providing enough incentive to continue to chase NZ’s high yields.
  • #97
  • Edited Jul 6, 2007 12:51am Jul 5, 2007 10:49pm | Edited Jul 6, 2007 12:51am
Quote
(NZ) TRADE MINISTER GOFF: NZD IS OVERVALUED; CURRENCY SPECULATORS "WILL GET FINGERS BURNT"
<NZD/JPY NZD/USD AUD/NZD>
Screw you! Last time I believed RBNZ will intervene, it kept going up 300 pips! RBNZ is simply a LAME DUCK!

I'd rather place my money where the Japanese are putting them. Sure it may be short NZD next time, but I'd rather be where the smart money is going.

Quote
Where are our friends from the Central Bank?

Actually, its more like RBNZ asking that of us...
  • #98
  • Jul 5, 2007 11:13pm Jul 5, 2007 11:13pm
According to the article in bloomberg ... companies in Nzd are already suffering. So i bet the business confidence is going to be very bad. Hopefully that will turn the grpah which looks like faling anymiute.

Short at 7824
  • #99
  • Jul 5, 2007 11:16pm Jul 5, 2007 11:16pm
I have to be enterally agree with Burgerking.

The RBNZ has already to start its move. By three times, the 11, 18 and 22 of June, they have sell off their money. The only problem is that the central bank decided 5 days ago to increase the rate, leaving the door open for further hike. In this condition the impact was pretty limited, the market correct the move in less than a week, and the second one didn’t have any impact at all. The reasons are simple. The first one is that the central bank isn’t over with its current tightening policy, and it is one of the principal condition for an intervention to have any impact.
The second one is also pretty simple. The current evaluation of the first intervention is estimated at around NZD$120, where an intervention of the BoJ is always estimate in billion of dollar. Moreover, and probably most important, the RBNZ margin of action appears to be limited given that the "special fund" that is at the disposal of the bank is only NZD 7 billion, which is pretty limited in comparison of the amount needed for this kind of action.
Nevertheless, we have to take into consideration that the kiwi is not as liquid as the Yen, but the feeling that the RBNZ doesn’t have what necessary and contradictory politic of the central bank won’t push the real actor, the market to stop the current move. The only good news for the RBNZ is that the cycle of tightening is not far to be over. However, the current counter-productive policy from the RBNZ won’t help until they clearly say that “its over”.
From a technical point of view, the intervention as been done in order at 0,7482, 0,7550 and 0,7640. One only look to the different level could push to question, since is has been done at highest level after one. Also, only the first one was “large” enough. The second one doesn’t seem to have any impact and the third one have seen its impact correct during the same day.

So, before criticising the market and any trader, the RBNZ has to do its job correctly. First, perhaps they could revise their policy, which are to hawkish for me in comparaison of the fundamental.
Secondly, an intervention has to respond to some criteria:
⇒ The exchange rate must be exceptionally high or low
⇒ The exchange rate must be unjustified by economic fundamentals
⇒ Intervention must be consistent with monetary policy objectives
⇒ Conditions in the market must be opportune
At this game, the third criteria is far to be satisfy, and i don't think that the last one is also satisfy. Concerning the two first one, I am not totaly satisfy too. Yes sure, the kiwi is really expensive, but the market is simply adjusting the price to the reality of the moment, which are:
- the RBNZ is not over with their tightening period in comparaison of the other central bank (a GBP/NZD will be interestent to watch)
- and the current high yield situation is pushing the kiwi higher. This last point is not just a trader thing, but represent the current reallity of the market. A currency is not just here to represent the fundamental of a country, but moreover, it represent the current situation of the exchange between two country and at this game the kiwi is perhaps expensive but not overvalued.

So before, critisizing everyone, the RBNZ has to start to do its job.
  • #100
  • Jul 5, 2007 11:23pm Jul 5, 2007 11:23pm
Quoting BurgerKing
Screw you! Last time I believed RBNZ will intervene, it kept going up 300 pips! RBNZ is simply a LAME DUCK!

I'd rather place my money where the Japanese are putting them. Sure it may be short NZD next time, but I'd rather be where the smart money is going.

correct, those bunch of monkeys at RBNZ are sitting there, scratching their balls... Idoit.

I think they are earning couple of millions when they want to move the KIWI down, then place a BUY... LOL.
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