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Forex Flash: AUD/NZD remains driven by monetary convergence – UBS

FXstreet.com (Barcelona) - Recently, we went short on the AUD/NZD as a trade recommendation on Jan 31st in the expectation that monetary policy settings in Australia and New Zealand would start to converge later this year. According to Research Analyst Gareth Berry at UBS, “The adjustment could happen in either direction - our economists think a more hawkish RBNZ is more probable than a more dovish RBA, although either outcome would suit our purposes.”

Another piece of evidence arrived overnight in support of these views – commodity prices of direct relevance to New Zealand's exports registered their largest monthly increase on record (+10.2% MoM measured in NZD). Meanwhile, the price of Australia's commodity basket remains subdued.

Forex: USD/CAD falls to 1.0070/77

The USD/CAD has edged lower Thursday, falling nearly 12 pips in recent moments after recording session highs in the region of 1.0090. The movement lower has been accompanied by a return to negative territory as markets brace for events and data in Europe. In these moments the cross has settled at 1.0070/77, down -0.06% during European trading.
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Forex: NZD/USD loses grip on 0.8500 level

The NZD/USD has been in retreat Thursday, falling a plunge yesterday that erased much of April’s gains. With a fresh weakness below the 0.8500 level during European trading, the pair is now settling in negative territory at 0.8471/77 at the time of writing.
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