Kiwi and Aussie tandem ride against Greenback

11.11 NZST, Wednesday 5 June 2013

Kiwi and Aussie tandem ride against Greenback

By Andrew May (Sales Trader, CMC Markets New Zealand)

The commodity driven currencies such as the Kiwi, Aussie and the Loonie have on the whole been heavily yo-yo'ing against the Greenback in the build up to key US jobs data late this week as traders weigh up elaborate positioning of risk averseness.

With the recent Fed 'will they or wont they' tapering, we've witnessed strong US dollar swings that have in succession pushed growth performance currencies lower. That is until a 'few snakes in the grass' appear then aptly disappear, naming US manufacturing data providing familiar economic growth headaches for the Federal Reserve again to contemplate.

The New Zealand and Australian dollars have been the winners in that round both shooting up in tandem around 150 points to reclaim a majority of late May falls. Expect further yo-yo'ing from these two currency pairs that seem to be moving in tandem and in a state of solidarity against the US dollar.

The Kiwi opened today just above US 80c, notably the weaker performer over the past 24 hours. Another test of sub US 80c looks likely if Australian GDP today and continuing luke-warm Chinese data appear short of the mark. With lower dairy prices, increasing speculation of possible currency intervention from the RBNZ, and the potential for a strong jobs number this weekend, last year’s 0.7920 support looks even more apparent.
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