Saturday, 29 December 2007

RBNZ Intervention disappears

The Reserve Bank of New Zealand (RBNZ) said on Friday it sold a net NZ$14 million ($10.8 million) of New Zealand dollars on the spot foreign exchange market during November.

The figure compares with a net NZ$10 million sold in October.

Back in June, the RBNZ sold a net NZ$736 million when it intervened on foreign exchange markets for the first time since the New Zealand dollar was floated 22 years ago to limit the rise in the kiwi. The figures are not a direct and complete indication of the amount spent on intervention and include liabilities of the New Zealand government's Debt Management Office.

Data from the central bank also showed its net short currency position - a figure which the RBNZ has said better reflects its currency dealings - rose to NZ$2.48 billion from NZ$2.4 billion in October.

Given that they began intervening at 0.7620 on 11 June 2007, their average is probably around 0.7700. So they are breaking even at present.

Lets hope they have learned, that it is best to let the markets find their own level.
What that true level is, nobody knows, least of all a central bank.

Friday, 28 December 2007


Toying with selling NZD and buying AUD at these levels.
If we see a move over 0.8900 will begin to build a short position.


Both these pairs look to trade higher yet.
So have added to long NZD/USD position at 0.7700 and added to long NZD/JPY position at 88.00.
NZD/USD should have a test of 0.8000 in the weeks ahead.
NZD/JPY should have a test of 91.00 in the weeks ahead.

Will review if 0.7400 NZD/USD and 84.00 NZD/JPY are broken on the downside.

Thursday, 27 December 2007

Saturday, 1 December 2007

NZD/JPY Trade - Still in there!

This trade has had it's share of surprises. Have added to it and reduced it as the markets have fluctuated.

The sub prime mess and the impact on the US economy has scared off a lot of the carry trade interest. So the NZD/JPY goes down and at one point was around 78.00 again.

But high NZD yields have driven the cross back up to 91.00 as well, so this cross has traded in a wide range over the last few months and is now back to the level it was when I last commented on it and am still in profit.

Am still of the view that the NZD/USD will breach 0.8000 again this year.
The NZD/JPY will also test higher, target is around 100, but probably next year.
Will look to acquire more on moves into the 80.00- 82.00 area.