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Globalization Causing Worldwide Inflation

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 […]

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Commodity Currencies Rise on Dollar Weakness

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 […]

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Nature of the Carry Trade Changing

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 […]

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US Dollar Movement

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 […]

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Asian Currency Intervention

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. So it used a taxpayer-supported fund to sell the New Zealand dollar in the foreign exchange market.  The Kiwi fell 100 points […]

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New Zealand Dollar Hits New Highs

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% […]

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The United States Dollar Versus The World – Getting Bang for Your Buck

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 […]

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Head and Shoulders

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 […]

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NZD/JPY Hits 81 – Carry Traders With Strong Gains

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 […]

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