December 21, 2010
Taking cue from its comdoll sibling, the Kiwi rose up the charts and posted some decent gains against the dollar in spite of the tight trading we saw yesterday. NZD/USD finished 55 pips higher to finish trading at .7418. Could this set the tone for the rest of the shortened week?
Clearly, yesterday’s move was driven by stronger sentiment towards higher yielding currencies like the AUD and NZD. Notice the divergence on other currencies like EUR and GBP, which didn’t exactly hold their own against the dollar yesterday. Could this be a recurring theme in 2011?
For today though, watch out for any reversals, especially since we could have a catalyst on our hands in the form of current account data at 9:45 pm GMT. Word on the street is that the Kiwis posted a deficit of 2.23 billion NZD during the 3rd quarter, indicating weaker trade. If this report were to post a larger than expected deficit, could it spell doom and gloom for the NZD?
"The only cable I watch is the pound baby."