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Old 12-10-2009, 08:35 AM   Nav to Top  #1
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Default European countries are being Downgraded, NZD/USD Jumps

After a choppy session, U.S stock traders decided to push the major indices higher towards the closing bell. Most of the trading day, the indices moved back and forth across their opening mark ,as downgrades and speculation of a deeper correction weighed on sentiment. The European markets experienced a negative session as Standard as Standard & Poor’s Ratings Services lowered Spain’s outlook on its debt to negative, one day after Fitch Ratings downgraded five Greek banks, raising worries about further debt grade reductions in additional European countries.

Furthermore, back in the U.S, Timothy Geithner addressed House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, saying that the Obama administration does intend to reduce the amount of money it is using to bailout the economy, but wants to extend the TARP program. According to the Los Angeles Times Business, Treasury Secretary Timothy F.Geithner triggered the near-automatic extension of the $700 billion Tarp until Oct.3, 2010. In addition President Obama took the stage, giving a speech about the current situation. The president commented on the Job situation, expressing his joy about the recent numbers, but wasn’t shy to state that the U.S economy is still in for hard times.

From a technical point of view the S&P500 found support on recent critical levels. As shown in yesterday’s report, the index is now trading above support of 1090 points, within a minor range. The index closed with a 0.37% gain, while the Nasdaq climbed by 0.96%.

This time round, the leading sector of the day was Materials, closing with a 1.25% gain. Energy and Consumer Discretionary finished the session flat.

S&P500 Daily Chart

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Old 07-05-2013, 10:14 PM   Nav to Top  #2
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Both NZD and AUD went up in value during the past four years due to hot overseas money. Now this money is flooding out of these countries. That so called carry trade has ended now. Since these countries floated their dollars, Australia and New Zealand have become favorite hot place for worldwide speculative money trading.

Speculative money flows are short term, and will flee at the sight of trouble. There is a regime shift now. AUSTRALIAN bond futures are weaker as hedge funds reacted to the situation.

I believe NZ dollar will go down sharply due to new development. It is overpriced by 45% against USD. During last couple of years it has appreciated by more than 50% against some Asian currencies. Now this cycle has reversed and NZD will go down not only against USD but also against some Asian currencies. I cannot understand reason behind appreciation of NZD. Now one by one currency players are unwinding their positions in both AUD and NZD. When everybody tries to take out of money from both AUD and NZD these currencies can tumble to the one of the lowest levels.

Now analysts including global banking analysts are revising their year end target and target in 2014 for NZD.

During last couple of years both NZD and AUD went up rapidly against other currencies particularly against some Asian currencies such as India rupee and Sri-Lankan rupee. I believe both AUD and NZD dollar have entered a multi-year bear cycle and the US dollar (USD) has entered a multi-year bull cycle.

The Fed might begin reducing its monetary easing program this summer and end bond buying completely later this year. Recently Billionaire investor Stanley Druckenmiller recommended that investors short the Australian dollar, was critical of Fed policy and praised Japan’s efforts to boost its economy by pumping in money.

The Australian and New Zealand dollars have each surged 45 percent against the U.S. dollar since the end of 2008.

According to following links NZD can go down further. However there can be dead cat bounce for NZD time to time. Intermediate trend for NZD is down now.

Skids go under kiwi dollar - may fall further

NZD/USD continues bear trend

My ideas are not a recommendation to either buy or sell any security or currency. Please do your own research prior to making any investment decisions. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites.
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