Earlier this
week we highlighted the beneficial effect that the announcement of the
change in the Chinese one-child policy had on the Kiwi. Unfortunately, that
did not last very long. Yesterday saw the double whammy of two sets of
statistics that showed a markedly deteriorating economic situation for New
Zealand. Firstly, figures from Fonterra, the large dairy co-op, showed that
dairy prices have fallen by 7.4% over the last two months, as against rises in
the price for the four months prior to that. Dairy products make up a very
significant proportion of NZ exports.
But worse
was to come. The quarterly report on employment which came out yesterday showed
that unemployment has risen again, for the fourth such report, to where there
is now fear that it could be approaching 7%.
As can be
seen from the chart above, the NZDUSD pair has now come to rest on the 200
period Exponential Moving Average (EMA) on the four hour chart. And the
long-term trend is down, as signified by the appearance of lower highs and
lower lows on the same chart.
Bankers under scrutiny both sides of
the Atlantic today
As expected,
Mario Draghi does not seem to have made any market moving contributions during
his welcoming address at the opening of the European Cultural Days event last
evening, although Reuters is reporting this morning that the ECB president
yesterday reiterated that the governing council will review the degree of
monetary stimulus they have deployed when they meet in December, and remain
willing and able to act if needed.
Today he
gives the welcome address at the ECB Forum on Banking Supervision in Frankfurt,
while over in the US, Janet Yellen, Chair of the Federal Reserve, is due before
the Committee on Financial Services of the US House of Representatives in
Washington, to be questioned on banking supervision and regulation. So bankers
are the subject of scrutiny on both sides of the pond today.
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