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Forex Flash: RBNZ creates waves following overnight report – UBS

FXstreet.com (Barcelona) - Official RBNZ statistics show that the central bank has been a net seller of New Zealand dollars over the past six month. Investors have been curious about this for a while, especially given this unusual activity began suddenly, and soon after Governor Wheeler took office in September.

Indeed, Wheeler broke his silence on the matter overnight. Under questioning by a parliamentary committee he said "there has been intervention" which "will become evident in the data, in our balance sheet". The amounts involved have been small so far. Only $NZ 199 million was net sold in December for example, and the selling virtually stopped completely in Q1.

Activity may have picked up very recently of course, especially given AUDNZD fell through 1.20 yesterday for the first time since Oct 2009. According to Research Analyst Gareth Berry at UBS, “We expect further clarity soon - official intervention data for the month of April is due for release May 30th. In the meantime a degree of caution is warranted. We remain short AUD/NZD as a trade recommendation for now, but keep the situation under review pending further news.”

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