Forex Flash: RBNZ currency intervention not always a success - Nomura

FXstreet.com (Barcelona) - Recently, RBNZ Governor Wheeler made some comments confirming recent intervention by the RBNZ to weaken the Kiwi. The initial reaction was dramatic as the pair plummeted lower, but some analyst point out the pullback in NZD/USD represents a buying opportunity.

According to analysts at Nomura, “Price action also suggests intervention is largely pointless in the face of roughly NZD1.5bn in exogenous inflows each month noting that, in its largest month of intervention (July 2007), the RBNZ sold NZD1.5b”

To conclude, the pair was down 7.32% in July 2007 (the month Nomura noted with largest intervention), but reversed all gains in the following month (August 2007) and was up 7.57%