News

Monday 14th July 2008

Ranges
NZD/USD 0.7483-0.7649
AUD/USD 0.9476-0.9718 NZD/AUD 7861-0.7950
LAST WEEKS NEWS

Last week was all about the US economy continuing to weaken. All the data, and the market, has pushed the Dollar lower. With the US Federal Reserve having to effectively bail out the two biggest home lenders in the States, and with oil pressure remaining high, the forecast isn't exactly what you would call pretty.

Here at home the data like wise is not great. With home prices falling, retail spending dropping, business confidence easing and growth dropping through the floor (need I say more) the only reason Kiwi hasn't seen a massive drop against the Dollar, is of course, they are both in bad shape. The only good thing about the NZ economy; is that we are out of range from Iran's missiles and that Def Leppard are coming here in November.

Across the ditch things are solid, with good employment data continuing to hold the Aussie especially with the USD in bad shape.

WHAT WE DID

Sold Kiwi on rallies and remain tiny short.

Got short Kiwi AUD on the rallies and traded the range on dips.

Stayed long AUD.

THIS WEEK'S NEWS

Lots and lots of NZ data out, most importantly the CPI tomorrow. If this is weak or even in line with expectations, then it's very likely we will see a drop in interest rates next week. So watch out for it, it will be a very important piece of data.

Like wise, we have lots of stuff out of the States with the FOMC statement on Thursday morning which should give us more direction and let us know what they are thinking going forward.

The main guts of it is that, even though we know Kiwi is extremely toppy and that the world is suffering high inflation with no growth , nothing is going to change unless we see some positive news on the oil and/or Dollar front.

WHAT WE WILL DO

Play 7550/7650 Kiwi

Buy AUD and Kiwi at 1.2650

Sell Dollars on rallies, most likely buying AUD