ja_mageia

Monday 19^th January 2009 

Ranges
NZD/USD: 5260-5891
AUD/USD: 6542-7040
NZD/AUD: 8061-8514

Last week
We saw the USD strengthen against all other currencies on the back of stability - apparently brought to the market by Mr Obama’s inauguration on the near horizon.

As markets came to terms with the fact that all is not well in the global economy, the AUD and NZD received a reality check this week. The AUD fell from 70 US cents to as low as 0.6537 and the NZD from 59 cents to as low as 0.5278. But profit-taking ahead of the weekend saw the AUD and the NZD recover slightly, seeing it squeeze above 0.6700 and 0.5450. 

The big mover was the Kiwi cross which came off significantly through the whole week and today remains near its lows.

What we did
Changed our initial view on the week early and had a very good trading week.

Got short AUD and Kiwi, stayed with it till Thursday

Remained short NZD/AUD after the initial move and still have this possie on 

This week
Looking for more of a return to risk appetite, as the bail outs have been coming thick and fast, as the central banks of every government are shelling out money to make sure that recent stability remains.

This should mean that we see AUD and Kiwi regain their recent levels, and that the USD sells off further.

The main focus here at home will be on the monetary policy statement due out next week. I am now expecting to see the RBNZ cut rates by at least 75 points and more than likely see them go 1 percent. This will give most New Zealanders a real kick in the wallet that we all need.

What we will do
Trade the NZD/AUD from the short side and look to sell on rallies

Buy AUD and Kiwi on dips but be wary of bad credit news.

The week ahead

Monday 19^th January
AUS
MERCHANDISE IMPORTS, DEC (0030)
US
MARTIN LUTHER KING JR DAY –MARKET HOLIDAY 

Tuesday 20^th January
NZ
CPI, DEC QTR (2145, MON)
FOOD PRICES, DEC (2145, MON) 

Wednesday 21^st January
AUS
CONSUMER CONFIDENCE, JAN (2330,TUE)
US
NAHB HOUSING INDEX, JAN (1800)
NZ
RETAIL SALES, NOV (2145, TUE) 

Thursday 22^nd January
AUS
NEW MOTOR VEHICLE SALES, DEC
US
HOUSING STARTS, DEC (1330)
BUILDING PERMITS, DEC (1330)
OFHEO HOUSE PRICE INDEX, NOV 

Friday 23^rd January
AUS
IMPORT PRICE INDEX, DEC QTREXPORT PRICE INDEX, DEC QTR