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10 Second Summary
RBNZ plays safe by keeping interest rates unchanged. Investors though unanimously give the thumbs down to the NZD. While the Down under currencies remain well supported at current levels for today, any further cracks in global economic sentiment is likely to see the AUD and the NZD come tumbling down the hill. For now the AUD remains the darling of the FX market.
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Australian Dollar
A stormy offshore session with big moves between the two extremes of the 91USc levels was the main feature of the AUD FX chart. Gold and Oil prices rally also added to the Aussie strength, though lingering economic concerns meant that the local currency remained exposed to sellers in the higher realm of 91USc. Expect the AUD to have limited topside ahead of the unemployment data later today, while having good support at the 91USc level.
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United States Dollar
Despite the bleak US wholesale inventories, the Dollar retreats broadly against most major currencies as Greece comments uplift market sentiments. The USD though managed to return back the Pacific volley after RBNZ keeps the OCR in neutral. However it’s not fair to write the Greenback obituary yet as markets still crave for the Dollar and at any sight of risk aversion, investors will be waving the ‘Buy USD’ flags again.
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Euro
As Greece fears take a back seat, the Euro uses the stronger performance of European stocks to supercharge itself against the major currencies. However the weaker German current account caused a few hiccups in the Euro acceleration. Expect the Single currency to remain in higher gear until the EU debit crisis sign-boards appear on the FX highway.
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Japanese Yen
With the back door entry of risk appetite to the FX gala last night, another Yen support line gets raided by the strengthening Pacific pair. While the Yen will continue to remain terrorized by the Aussie raiders, the NZD having lost the RBNZ support is likely to soften its stance against the Yen.
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New Zealand Dollar
The brief Kiwi trip above the mid 70USc level, on positive global sentiment, was cut short as RBNZ leaves the OCR unchanged at 2.5%.Though moderately firmer equity and commodity prices should cushion any NZD free fall, investors are clearly disappointed at the disparity in the OCR on the two sides of the Tasman. Expect the Kiwi to remain vulnerable to a falling support level, with the next safety net well into the 69Usc levels.
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