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NZD/CAD – Fresh Highs Ahead?
We talked about the kiwi strength earlier today when we noted that,”The New Zealand dollar was propelled by comments from the country’s Prime Minister John Key, a former currency trader himself, who stated in CNBC interview that in his opinion intervention would not work. Mr. Key was referring to the kiwi’s strength especially against the Australian dollar as the cross continues to hover near parity.
In Mr. Key’s view intervention only works at the points of extreme, but is ineffective against a long sustained trend. With RBNZ resolutely set against lowering rates in the foreseeable future the kiwi remains the preeminent carry trade in the industrialized world and that factor continues to prop the unit against G-10 currencies.”
With tomorrow’s CAD employment data due at 12:30 GMT the prospect of big miss and a therefore the possibility of yet another rate cut by the BOC looms large. Therefore, we could have a trigger that could push the pair to fresh yearly highs as rate differentials continue to widen out.
Having made a series of higher lows the uptrend in the pair remains in tact and the 9600 figure is the next target of the longs which if broken opens up the way to a run towards .9800