- NZD began the day higher thanks to hawkish rhetoric from RBNZ’s Spencer
- Latest GDT auction results rise and support Kiwi strength
- NZDUSD forming a possible base around 0.68
The New Zealand dollar has been one of the best performers in the G10 today. The Kiwi was already higher by the time European traders got to their desks thanks largely to comments from RBNZ Governor Spencer who said that it might be time for monetary policy to put more weight on output, employment and financial stability rather than inflation.
The New Zealand dollar has experience a fairly large slide in recent months, due in part to some sharp drops in the milk price. The fortnightly GDT price index auction is widely seen as a global benchmark for dairy prices, and seeing as this is New Zealand’s largest export it can be known to have an impact on the NZD.
The latest results this afternoon have seen a first rise in 5 for the index, with a 0.4% increase reported. The prior two readings in particular have been negative with successive drops of more than 3% signalling sharp contractions in price and therefore today’s rise is a positive development.
The GDT price index rose by 0.4% in the latest auction, ending a run of 4 substantial declines. Source: globaldairytrade.info
A closer look at the NZDUSD reveals the market may be testing an important level with a falling trendline dating back to late August coming in to play. There could be an inverse head and shoulder forming with the head at the low of 0.6782 and the trendline a possible neckline.
NZDUSD is looking to recover some of the declines seen in recent months. A break above the falling trendline could spark a move higher. Source: xStation
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