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Why is NZD so strong??

  • #141
  • Jul 15, 2007 10:50am Jul 15, 2007 10:50am
Quoting AlexFX
Add this to the mix....

http://www.nzherald.co.nz/section/3/...ectid=10451542

Regards
From the article:
Quote
But the question remains - when will interest rates go down?
"I think the Reserve Bank will be quite content to see interest rates stay high for a considerable period of time," Gibbs said. "Once the housing market finally does slow, the last thing they are going to do is fire it up again."

NZ CPI q/q looks like a main event after this week's Sydney open. I've been short NZD/USD since June 20 on intervention expectations.
  • #142
  • Jul 15, 2007 7:37pm Jul 15, 2007 7:37pm
Quote
NZ RATE OUTLOOK AFTER STRONGER THAN EXPECTED CPI DATA: TRADERS INCREASED THE ODDS OF A 25BPS RATE HIKE BY THE RBNZ TO 68% FROM 44% LAST WEEK (INDEX CALCULATED BY CREDIT SUISSE, BASED ON TRADING IN INTEREST RATE SWAPS)

<NZD/USD NZD/JPY>


After this CPI data, I totally doubt RBNZ will even dare think of intervening! They could intervene when they decide to not increase the OCR within 2 weeks, that will totally discourage the traders and RBNZ could go to the market selling NZD to add fuel to drop nzdusd!


However, instead of trading NZDUSD, i suggest you to trade NZDJPY instead.
Quote
OPTIONS TRADING: THE OPTION TRADE WE RECOMMEND LOOKS TO BENEFIT FROM A MOVE DOWN BY THE KIWI TOWARD 86 YEN IN THE NEXT THREE MONTHS - LEHMAN
- "When risk aversion picks up, the yen crosses tend to spike, with the yen strengthening."

USD is simply too weak and foreseen to go weaker by the week. Thus NZDUSD would not drop much even float at current levels. JPY is weak and could go stronger in the coming months (ie, Japanese housewives will soon bring home the bacon)
  • #143
  • Jul 15, 2007 8:02pm Jul 15, 2007 8:02pm
Quoting BurgerKing
However, instead of trading NZDUSD, i suggest you to trade NZDJPY instead.


USD is simply too weak and foreseen to go weaker by the week. Thus NZDUSD would not drop much even float at current levels. JPY is weak and could go stronger in the coming months (ie, Japanese housewives will soon bring home the bacon)
I agree, as I'm also short USD/JPY.
  • #144
  • Jul 16, 2007 12:37am Jul 16, 2007 12:37am
NZDUSD just broken through 0.7900. 0.8000 very soon.

I dont hear RBNZ's loud mouth "we will intervene" talks anymore...
  • #145
  • Jul 16, 2007 3:38am Jul 16, 2007 3:38am
Its interesting being a NZlander and lurker here for a year or two now, when
you would short this beast,,,amazing,, buying power with kiwi is phenomenal
new singapore imported Mercedes anyone.
  • #146
  • Jul 16, 2007 4:47pm Jul 16, 2007 4:47pm
Well I missed the last two entries I could have had to take this long. Wasn't around when they happened. It seems to have settled around 7910-20 for now. Maybe it will settle here & I can grab another entry for the 8000 hit. Only 75 pips away as I write this. I wonder if any one has any thoughts about what happens @ 8000. Does it keep going up or will this be a significant resistance.
  • #147
  • Jul 16, 2007 8:16pm Jul 16, 2007 8:16pm
Quoting simonjmo
Its interesting being a NZlander and lurker here for a year or two now, when
you would short this beast,,,amazing,, buying power with kiwi is phenomenal
new singapore imported Mercedes anyone.
simonjmo - How high will the OCR have to go before the housing demand starts to slow there? Does the RBNZ seem to be moving too slow to control the inflation?
  • #148
  • Jul 17, 2007 12:12am Jul 17, 2007 12:12am
guys i am short nzd/jpy at 96.40, with all this talk about strength of nzd; any hopes of me closing this position in profit?
THE TREND IS UR FRIEND
  • #149
  • Jul 17, 2007 12:16am Jul 17, 2007 12:16am
Quoting tradechief
guys i am short nzd/jpy at 96.40, with all this talk about strength of nzd; any hopes of me closing this position in profit?
On profit taking maybe it's 96.47 now you might see 20 pips tops. There is persistent dip buying in that cross.
Patience + Humility + Study = Success
  • #150
  • Jul 17, 2007 1:37am Jul 17, 2007 1:37am
Waiting to long this pair below 7900, but the dips are quite shallow now so mulling a possible 7907/10 long for 8000
Patience + Humility + Study = Success
  • #151
  • Jul 17, 2007 2:51am Jul 17, 2007 2:51am
Quoting BurgerKing
JPY is weak and could go stronger in the coming months (ie, Japanese housewives will soon bring home the bacon)
Do you really mean it? It doesn't look as though JPY can ever become a pillar of world's financial products except yen-carry trade. Even if Bank of Japan may hike the lowest interest rates in August, it would be no more than 0.75%.
Generally speaking, August is called "summer decline market" month in Japan. Even if each person may close a position(liquidation of longs) at some stage, people would have no alternative other than to reinvest earnings.
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #152
  • Jul 17, 2007 3:06am Jul 17, 2007 3:06am
Quoting Fumafuma
Do you really mean it? It doesn't look as though JPY can ever become a pillar of world's financial products except yen-carry trade. Even if Bank of Japan may hike the lowest interest rates in August, it would be no more than 0.75%.
Generally speaking, August is called "summer decline market" month in Japan. Even if each person may close a position(liquidation of longs) at some stage, people would have no alternative other than to reinvest earnings.
who is richer? JPY banks & govt or US banks & govt?
  • #153
  • Jul 17, 2007 3:11am Jul 17, 2007 3:11am
US is rich? Even Bill Gates and Buffet combined value cant lift their debts...think the money is just gonna vanish into thin air.
  • #154
  • Jul 17, 2007 4:35am Jul 17, 2007 4:35am
Quoting technamental
simonjmo - How high will the OCR have to go before the housing demand starts to slow there? Does the RBNZ seem to be moving too slow to control the inflation?
This Market here to me feels like a US late 05 early 06 situation/stupid
if you would have said to me 2 years ago the Nz dollar would be 80,the
floating interest rate 10.3% and working class houses nearing 500,000
i would have called you insane.

I think the reserve bank wont raise july 26th.Interesting though i know a few
real estate agents they have been filing there nails looking out the window
this month.
  • #155
  • Jul 17, 2007 8:10am Jul 17, 2007 8:10am
After all the prediction of the 'correction' of the NZD on this thread and picking the top several times I think everyone is starting to doubt when this trend will slow down!

Our local news here seems pretty convinced bollard is going to raise interest rates next week after the strong inflationary data releases last week but I agree with BK that if interest rates stay the same the RBNZ might add some pressure by selling NZD and lowering the currency.

However I don't think the 'big correction' is going to be coming any time soon. As in the next 2 months. RBNZ is certainly not going to lower interest rates soon and with the highest interest rate in OECD its always going to be an attractive yield.

Don't try and pick a top. Wait for strong resistance levels confirmed by repeated fundamental data . I think .80c will be very strong resistance and provide scalping opportunities but I think it will be broken especially if we see another rate hike.

I am hanging out a little longer...but the ride down will be a good one!
{ Link Removed }
  • #156
  • Jul 17, 2007 9:37am Jul 17, 2007 9:37am
After the Jap tertiary numbers last night, there won't be a rate hike for at least a couple of months. Factor in crude oil running to the moon. That paves the way for more carry trades and a weaker yen. NZD/JPY is the place to be long. Don't be a trend fighter, that is how you destroy your account. Some major fundamental factors are going to have to change, in order for this pair to reach a top. I have spoken with some big traders, guys with much much more money than myself, and they see no big reason to unwind their carries. Many people will say that sort of complacency lends itself to major corrections, even reversals. Maybe so, Maybe not, just don't put your account on the line by being short NZD/JPY.
  • #157
  • Jul 17, 2007 9:39am Jul 17, 2007 9:39am
Quoting jordancash
After the Jap tertiary numbers last night, there won't be a rate hike for at least a couple of months. Factor in crude oil running to the moon. That paves the way for more carry trades and a weaker yen. NZD/JPY is the place to be long. Don't be a trend fighter, that is how you destroy your account. Some major fundamental factors are going to have to change, in order for this pair to reach a top. I have spoken with some big traders, guys with much much more money than myself, and they see no big reason to unwind their carries. Many people will say that sort of complacency lends itself to major corrections, even reversals. Maybe so, Maybe not, just don't put your account on the line by being short NZD/JPY.
I look for an eventual 100.00 in that pair. As for the NZD/USD that pair moves slower, but all in all I'm bullish on the entire Kiwi complex. Looking for dip buying opportunities.
Patience + Humility + Study = Success
  • #158
  • Jul 17, 2007 11:25am Jul 17, 2007 11:25am
Quoting DutchTrader
I look for an eventual 100.00 in that pair. As for the NZD/USD that pair moves slower, but all in all I'm bullish on the entire Kiwi complex. Looking for dip buying opportunities.
LOOKING at DIP but not happening for the past few days.. missed the 7700 area!
  • #159
  • Jul 17, 2007 5:00pm Jul 17, 2007 5:00pm
Funny......

I looked at the NZD/USD chart this morning, and the "SELL" button was gone. Same thing with the other NZD charts.


It's all about the interest baby! Too bad I am not much of a carry trader.
  • #160
  • Jul 17, 2007 5:03pm Jul 17, 2007 5:03pm
Quoting clockwork71
Funny......

I looked at the NZD/USD chart this morning, and the "SELL" button was gone. Same thing with the other NZD charts.


It's all about the interest baby! Too bad I am not much of a carry trader.
:lol@sell button gone
Patience + Humility + Study = Success
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