Morning Report Foreign Exchange Forex 2000 NZ LTD

Forex NZ 2000
Indicative rates at Market Open (06.30am)
Morning Report
20/09/2011

NZD

The Kiwi trades in a narrow band after referee calls ‘scrum’ over global liquidity. While the Greek funding hopesdid managed to turn the NZD tide, the Kiwi still traded around the 82USc level. Lack of local data is likely to rob the Kiwi any opportunity to race towards the topside of the 83USc levels. With offshore volatility still high, thedownward pressure on the Kiwi will continue for now ahead of the important Fed meet.
AUD

The AUD struggles to break free of the risk aversive shackles and hovers at the 1.02USc levels. The AUD isunlikely to affect any meaningful rebound ahead of today’s RBA meeting minutes. While the overall concerns of aglobal economic slowdown are Aussie negative, tommorowt’s Fed meet could provide some underlying support forthe local currency when released on 21 Sept.

USD

Anxiety over slowing US economy and Europe’s debt crisis encouraged investors to exit risky trades and seekrefuge in the Dollar. Fed trying to push for new measures to stimulate growth without upsetting the balance of thereserve currency could turn out to be Greenback positive in the long run. Expect the Dollar to be all kitted up fortomorrow's FOMC match.

EUR

Greece’s new found optimism on reaching a deal to release bailout funds helped the Euro pare losses. Howeverwith investors still not convinced that Greece was close to solving its debt problems, the Single currency’s end score was still negative. With very little groundwork done to fill the gaping hole in the sovereign debt, the Euro willcontinue to suffer the wrath of trading Zeus.

JPY

Though range bound the Yen was nearing the topside across the board. Intervention fears prevented the JPYfrom going overboard and kept the local currency composed. Expect the BoJ to remain on edge as risk aversionreturns to the market.

Outlook

Unable to hold onto the topside, the Pacific pair were quickly overcome by the seller’s gravity. While a technicalrebound could be in store for the AUD and NZD this morning, importers are advised not to play in the fiery pits of theFX markets and secure their short term needs before Mt Olympus erupts again but watching for the ever awaiting Fedmagic to blow on it's whistle again.