- NZ dollar is by far the strongest currency in G10 following the appointment of a new governor
- Bitcoin (BTCUSD on xStation5) keeps its upward momentum after a launch of futures at CBOE
- Chinese inflation stays subdued, Asian equity markets move higher in the aftermath of gains seen in the US
Although Bitcoin was expected to steal the show over the weekend, we got quite an interesting story from the broad FX market as well which decisively buoyed the NZ dollar. Namely, the country named Adrian Orr as its new central bank governor who is poised to begin his 5-year term in office on 27 March 2018 replacing acting governor Grant Spencer. Notice that Orr is currently chief executive of the New Zealand Superannuation Fund and he was a deputy governor at the RBNZ previously before he left the bank in 2007. A new governor is seen as a more hawkish one compared to Spencer and even as a difference is not so big on the surface, it could stand behind NZD strength. According to Finance Minister Grant Robertson ’this is an important time for the Reserve Bank and New Zealand’s monetary policy framework and Orr has the standing and ability to manage this process of change as governor of the bank’. On the other hand there are also voices that he is neither a hawk nor a dove at least according to a BNZ’s note. Either way, the NZ dollar is gaining as much as 0.9% at the time of writing being definitely the best performing currency in the G10 basket.
Technically the pair could not have an easy task to pursue its rally as a crucial descending trend line might halt upward impetus. Do notice that this line has already stopped rises twice so far, hence until buyers are able to close a daily candlestick above this resistance, broader swings higher could be contained. However, while bulls break this line durably, it could enable them to move toward 0.7060.
Bitcoin (BTCUSD) is also worth mentioning as it’s kept its bullish momentum thus far following a launch of BTC futures at CBOE. Nevertheless firstly the price dipped during the weekend in anticipation of a launch, it spiked when trading at CBOE began though. As for now Bitcoin is slowly approaching $17,000 after a bounce from an ascending trend line. We’ll provide a more in-depth research on the latest stories regarding the cryptocurrency.
Looking beyond one may notice that the Asian stock markets have had a fairly successful beginning to the week which could have been the ramification of gains registered on Wall Street on Friday. In terms of data we got Chinese inflation on Saturday which came in at 1.7% yoy against a forecast 1.8% yoy. On the other hand, PPI saw a 5.8% increase which was in line with forecasts. To sump up we could argue that there is no huge inflationary pressure anywhere except countries which have seen their currencies plunging.
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