Dollar staying high - for now
The New Zealand dollar remains comparatively high as the world financial markets brace themselves for what could be another week of turmoil.
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The New Zealand dollar remains comparatively high as the world financial markets brace themselves for what could be another week of turmoil.
A further drop though is likely this week, following a Commitments of Traders (COT) report by the Commodity Futures Trading Commission showing large futures market players have cut back their long positions for the New Zealand currency, along with the Canadian dollar, UK pound sterling and the Mexican peso.
The New Zealand dollar is currently standing at 81.82USc, after a turbulent fortnight when it skidded from above 88USc to, briefly, just above 79USc.
However the drop was not as far as it would have been in previous bouts of financial conniptions, said Bank of New Zealand currency strategist Mike Burrowes.
“This is not to say NZD/USD cannot fall further if global sentiment deteriorates, but that for now the fallout has been relatively contained for NZD/USD and it still remains at historically very high levels….Should global risk sentiment stabilise, expect the NZD’s yield advantage to support the currency. In the near-term, concerns around global growth are likely to see NZD/USD struggle above 0.8500, while decent support would be expected ahead of 0.7900."
Rob Hosking
Mon, 22 Aug 2011
Mon, 22 Aug 2011
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Dollar staying high - for now
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