September 28, 2012
Thanks to the return of risk appetite, the Kiwi had quite a good run yesterday as NZD/USD rallied beyond the .8300 handle and closed at .8317. The question is, will it be able to hold on to its gains and go for more?
It's surprising that the Kiwi still managed to end the day in the green against the Greenback since it released a couple of weak figures yesterday. The NBNZ business confidence figure showed a slight downturn in sentiment as the figure fell from 19.5 to 17 in September. Meanwhile, building consents also showed a slowdown as the figure dropped from 2.2% to 1.9% in August.
Luckily for the Kiwi, risk sentiment was king yesterday as market participants bought up higher-yielding currencies after Spain unveiled its reforms and budget plans.
There are no reports set for release from New Zealand today, which means that the Kiwi could trade on risk sentiment again. Unless we hear of negative updates from the euro zone or see another round of weak figures from the U.S., NZD/USD might be able to stay afloat until the end of the week.
"The only cable I watch is the pound baby."