The NZD USD continued to surge to the upside as investors ignoredpossible bearish news and uncertainty regarding the New Zealand economyand instead chose to focus on the desire for higher yielding assets.
The NZD USD continued to surge to the upside as investors ignored possible bearish news and uncertainty regarding the New Zealand economy and instead chose to focus on the desire for higher yielding assets.
One negative factor which could prove to be harmful to the economy should it continue to show weakness is the news that Fonterra, the world’s largest dairy exporter, may pay its New Zealand suppliers less next season.
Another reason to be careful adding on to profitable positions at current levels is the release of the country’s budget tomorrow. The S&P Corp. is particularly interested in seeing if the country’s financial position has improved since its last budgetary report in January. The budget showed so much fiscal irresponsibility the last time it was issued that the S&P Corp. turned negative on the economy and cut the country’s foreign currency credit rating.
Based on the higher close near the high of the day, it’s difficult to say that traders were nervous today about tomorrow’s budget report. Looking at the price action, selling pressure is not likely to surface until a resistance zone at .6553 to .6945 is tested by the end of the week.