Since markets opened after new year we have seen overall USD strength against majority of pairs with Euro, GBP, JPY all losing ground against USD. However, the price action was completely opposite on NZDUSD with an almost 200 pips bullish move.

In my view this move is purely based on fundamentals, as some recent reports suggest that New Zealand is likely to raise interest rates this year. Moreover, the Reserve Bank also laid out a plan to bring rates from the record low of 2.5% to 4.75% by the first quarter of 2016. Since no other majors central bank is as hawkish as the RBNZ and with a high and growing yield, the New Zealand Dollar should attract a significant amount of investment this year. What makes NZD even more attractive is that demand will be supported by economic growth.



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