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Forex Flash: NZ-US interest rate differentials consistent with a NZD/USD around 0.8400 – BNZ

According to Currency Strategist at BNZ Mike Jones, latest NZD/USD down move “ran out of puff” yesterday, stalling around the 0.8190 and bouncing till recent fresh weekly high at 0.8284, last at 0.8268.

“It’s worth noting,” the analyst says, “NZ-US interest rate differentials – a key ‘fundamental’ driver of the NZD/USD ­– have barely budged over the past fortnight. On their own, they are consistent with a NZD/USD around 0.8400. This lends weight to our view that the recent NZD/USD selloff has been driven more by global risk aversion and a speculative positioning than any change in ‘fundamentals,’” he reckons.

Mike adds: “Another key fundamental driver of the NZD – commodity prices – continue to trend higher in world terms. This was confirmed by yesterday’s 1% gain in the ANZ commodity price index. We expect tomorrow’s GDT dairy auction to continue this theme with another increase in milk prices,” he concludes.

Forex: AUD/NZD awaits RBA above 1.2300

AUD/NZD is still feeling some selling pressure as it trades at 1.2333 asks, off recent fresh weekly lows at 1.2308, down -0.32% for the week, mostly on stronger Kiwi than Aussie, or perhaps better said Kiwi not as weak as Aussie, though NZD/USD is still higher for the week, while AUD/USD is back to negative. NZD/USD bounced yesterday from fresh 2013 lows at 0.8192, last at 0.8270, while AUD/USD is last at 1.0197, off fresh weekly highs at 1.0220 following better than expected Aus retail sales and current account deficit.
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Forex Flash: Sticking to 0.3% Aus GDP on March 6 - NAB

Following the upbeat Australian retail sales at 0.9% in January, with most categories rising, and net exports at +0.6% points to GDP growth, the NAB team is "sticking with a 0.3% GDP pick for tomorrow" notes David deGaris, senior economist at the bank.
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