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  • Globalization Causing Worldwide Inflation

    Jul 23, 2007 / 11:04am / in Americas, Asia, Australian Dollar, Canadian Dollar, Economics, Fundamental, Interest Rates, New Zealand Dollar, Oil, United States Dollar, Forex News

    Inflation has always been an important concern for currency analysts, if only because it has a direct relationship with interest rates.  Central banks have a mandate to keep inflation under control, and so signs of rising inflation indicate a strong currency.  But the new paradigm of an increasingly international economy could leave monetary policy makers impotent in the face of global inflationary surges.

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  • Commodity Currencies Rise on Dollar Weakness

    Jul 19, 2007 / 6:44am / in Americas, Asia, Australian Dollar, Canadian Dollar, Carry Trading, Interest Rates, Japanese Yen, New Zealand Dollar, United States Dollar, Forex News

    Commodity currencies have been beating up on the US dollar and the Japanese yen recently and yesterday was no different.  The Canadian dollar, the New Zealand dollar and the Australian dollar all hit new highs, an occurrence so common in that last couple of weeks that’s most traders simply yawned.  Some of the underlying support for these currencies comes from high commodity prices, especially oil and gold, of course.  But much of the gains should also be attributed to weakness in the US dollar and the yen carry trade.

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  • Nature of the Carry Trade Changing

    Jul 17, 2007 / 6:28am / in Carry Trading, Japanese Yen, New Zealand Dollar, Forex News

    Two words have dominated the forex market recently: carry trades.  Much of the dynamic price action in foreign exchange has been influenced by the drive for yield best demonstrated by the carry trade.  Currency traders have made a killing borrowing Japanese yen and Swiss francs and using that money to fund high-yielding purchases in Australia and New Zealand.  But the story is about the changing nature of the international carry trade.

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  • US Dollar Movement

    Jun 12, 2007 / 5:57am / in Carry Trading, General, New Zealand Dollar, United States Dollar, Forex News

    The primary market mover on June 11 was RBNZ’s intervention in the currency market to drive the Kiwi lower.  The central bank’s decision to sell the currency did move the New Zealand dollar lower against most major currencies.  Following up on that story, the Kiwi has shown signs of a rebound from yesterday’s lows.  The country still boasts the highest interest rates among highly-traded currencies in the forex market.  As such, the Kiwi is attractive to institutional investors, including multinational banks and pensions funds.  But most currency m

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  • Asian Currency Intervention

    Jun 11, 2007 / 6:28am / in Carry Trading, Forex Trading, General, Money, New Zealand Dollar, Forex News

    The Reserve Bank of New Zealand intervened in the foreign exchange market on the morning of Monday, June 11, 2007.  The central bank felt that the currency was at an unreasonable high level.

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  • New Zealand Dollar Hits New Highs

    Jun 7, 2007 / 1:12pm / in General, New Zealand Dollar, News Releases, United States Dollar, Forex News

    The Reserve Bank of New Zealand raised its benchmark rate to 8.00% on June 6th, 2007.  The 25 point increase surprised markets and led to a general appreciation of the New Zealand dollar.  The Kiwi, the nickname for New Zealand’s currency, rose 0.7% yesterday against the US dollar to 75.56 cents.  Analysts predict another 0.5% rise today to 75.75.  These values represent 25 year highs for the Kiwi, the strongest the currency has traded since it began trading freely in

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  • The United States Dollar Versus The World - Getting Bang for Your Buck

    Jun 7, 2007 / 12:06pm / in Australian Dollar, General, Interest Rates, New Zealand Dollar, Forex News

    The New Zealand dollar and Australian dollar are seeing record highs at Wednesday’s closing versus the United States dollar.

    After unemployment rates bottomed to less than 4%, a 33-year low, the Aussie reached a point it had not been to in 17 years.  It closed yesterday up 0.5% to 0.8444 against the dollar and 0.6 per cent to Y102.46 against the yen.  This raised much speculation that Australian interest rates will be raised in the near future. 

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  • Head and Shoulders

    Feb 14, 2007 / 5:56am / in Forex Trading, New Zealand Dollar, Patterns, Forex News

    We have an early head and shoulders formation on the NZD/USD monthly chart. Many would wait until the bottom of the shoulder before taking a short, but even if you target the middle of the shoulder you have about a 400 pip move possible.

    Beware this trade could take a while to develop as we are looking at a monthly chart and the carry is against you on this trade.

    Definition: Head and Shoulders
    Kiwi Dollar

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  • NZD/JPY Hits 81 - Carry Traders With Strong Gains

    Dec 13, 2006 / 5:29am / in Carry Trading, Forex Trading, Japanese Yen, New Zealand Dollar, Forex News

    The carry trade carries on to 81.00. After falling 1300 pips in from February to May, the NZD/JPY recoups all the losses in the next seven months. In addition, this pair yields the highest of any heavily traded currency pair at 7%. So even if you bought at the very high in February, if you stayed in the trade you come out doing fairly well. Using 10:1 leverage which is a standard amount for many professional traders, you would have earned 70% returns in the last ten months.

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