In recent weeks NZD has succumbed to rapid declines as we approach lows not seen since 2009. There can be an argument that the NZD has succumbed to general dollar strength but with a continuing weaker dairy outlook and the RBNZ signalling that rate hikes are concluded for the moment it’s not surprising that the market is seeing a reversal of what was one of the best performing currencies of 2013. The NZD was again under pressure overnight following the release of NZ trade data that showed a NZD 692mio deficit with the detail outlining a 475mio reduction in exports. The New Zealand dollar is often referred to by currency traders as ‘the bird’ with reference to the theme of birds that are used on coins in New Zealand with the above showing the kiwi bird on the one dollar coin.
USD/JPY has rejected the 104 level, led by a weaker session for the Nikkei as the Japanese equity market approaches multi-decade resistance levels seen towards the 15,650 level.
The dollar looks in general to have been filling the gaps and consolidating following the strength seen on the market open this week as the FX market digested comments from the Jackson Hole Symposium over the weekend.
The UK returns from a holiday weekend as the Scottish independence campaign was given a boost following what was deemed a strong performance by Alex Salmond in the latest televised debate against Alistair Darling where he fended off doubts about the currency as he pleaded with the Scots to take their destiny in their own hands.
Looking ahead US data will dominate market proceedings today with the release of durable goods and consumer confidence. The former is likely to be distorted by aircraft orders.
Supports 1.3175-1.3105-1.3000 | Resistance 1.3250-1.3295-1.3380
Supports103.50-102.95-102.50 | Resistance 104.30-104.85-105.05
Supports 1.6550-1.6500-1.6420 | Resistance 1.6600-1.6640-1.6700
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