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COZfx: NZD/USD weekly outlook

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COZfx: NZD/USD weekly outlook

Postby dwang » Mon Apr 28, 2014 2:51 am

COZforex: The New Zealand regained ground against its US counterpart on Friday but held near a 3 weeks low struck in the previous session as traders continued to weigh uncertainty surrounding developments in Ukraine.

NZD/USD dropped to 0.8547 on Thursday; the pair’s lowest since April 4, before subsequently consolidating at 0.8580 by close of trade on Friday, up 0.18% for the day but still 0.11% lower for the week. COZFX strategist Nigel Boynton said, NZD/USD is likely to find support at 0.8531, the low from April 4 and resistance at 0.8636, the high from April 24.

Concerns over the conflict between Russian and Ukraine escalated on Friday after US Secretary of State John Kerry warned that Washington was ready to step up economic sanctions against Russia. Meanwhile, ratings agency Standard & Poor’s cut its rating on Russia on Friday, citing the potential for “additional significant outflows” of capital due to escalating hostilities with Ukraine. The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.

Elsewhere, in New Zealand, the Reserve Bank raised interest rates by 0.25% earlier in the week and increased its growth estimate for the quarter ending in March. In a widely expected move, the RBNZ raised its benchmark interest rate to 3.00% from 2.75%. The central bank also said that gross domestic product is estimated to have grown 3.5% in the year to March, compared to the previous month's estimate of 3.3%.

Commenting on the decision, RBNZ Governor Graeme Wheeler said the strong kiwi is helping to contain inflation, though current levels may not be sustainable.

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending April 22. Net longs totaled 20,175 contracts as of last week, compared to net longs of 18,213 contracts in the previous week.

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