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DAY 10 - RBNZ MONETARY POLICY ANNOUNCEMENT

The most important event risk on the calendar this week is the Reserve Bank of New Zealand’s monetary policy announcement. Having raised interest rates at the last 2 meetings, the RBNZ is the world’s most hawkish central bank and 85% of the economists surveyed by Bloomberg expect the central bank to raise rates for the third time in a row. However I believe rates will remain unchanged and this discrepancy is where I see the opportunity to sell the NZD/USD.
Since the last monetary policy meetin…
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JPY STRENGTH

USDJPY has broken below 102 continuing its slide against JPY on the heels of the BoJ's disappointing lack of additional money-printing. Since Friday USDJPY has fallen over 250 pips along with other major currencies such as EURJPY, GBPYJPY, AUDJPY.
In fact USDJPY had its biggest daily drop in 8 months after stimulus hope premia is removed from the FX carry trade juicer. This dive has driven Nikkei 225 futures down almost 1000 points from Friday's
highs.
The BoJ is expected to add more stimulus by…
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RBA Monetary Policy Meeting Minutes

Fundamental View

The Reserve Bank of Australia will publish its minutes from the early March policy meeting on Monday. On March 4 the RBA held the Australian rate steady at 2.5%. This week's minutes are expected to return to the AUD overvalued narrative as more exporters are pressuring the central bank after the currency continues to trade over 0.90. Traders are curious to to hear comments on Australian employment front. Housing and exports are recovering, but unemployment continues to rise whi…
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REVIEW OF RBA MONETARY POLICY MEETING

Going into the monetary policy meeting, A$ was trading near its 3 year lows because investors had been pricing in one more rate cut in 2014. According to the CFTC, there was also a significant amount of short positions in the Australian Dollar, so when the RBA said “on present indicators, the most prudent course is likely to be a period of stability in interest rates,” it immediately prompted short covering. For the first time in a number of months, the central bank also did not describe the Au…
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