Asia Session

For the second straight day in Asia, the Kiwi Dollar has stolen the show. The New Zealand Dollar exploded as data showed that the country has escaped from recession, thus triggering a dynamic Dollar selloff that was amplified by the poor liquidity due to the final day of the three day Japanese Holiday. New Zealand GDP snubbed the -0.2% forecast for Q2, coming in at a surprising +0.1%, and in doing so, convincing many that a RBNZ rate hike might show up sooner than later.

When the data was released NZD/USD was catapulted from 0.7190 levels to crest the 0.7305 level, and then the US Dollar dominoes began to fall in a stop loss driven collapse. USD/JPY stops were triggered through 91.10 and the pair finally hit bottom under 90.50 on the move. Next in line for the move was USD/CHF, which dropped from 1.0235 to 1.0185 in a violent sweep, pushing the Swiss Dollar higher across the board. As these players were in the forefront of the stage, EUR/USD popped from 1.4790 to 1.4840 and GBP/USD jumped from 1.6360 to north of 1.6400 and the AUD/USD hit 0.8785 after sitting at 0.8730. AUD/NZD shed almost 150 pips to touch a 8 month low of 1.2010. Most pairs rebounded back to earlier levels, however the NZD/USD remained elevated near 0.7270 and the British Pound continued higher to 1.6410 levels ahead of the UK Bank of England minutes.

The Kiwi's strength and surge to a 14 month high today has shown that the New Zealand currency is at the forefront of the risk aversion surge at the expense of the greenback. Most traders will now put their heels up and wait for tomorrow's FOMC commentary in order to get a fresh perspective on future dollar moves. As well, Japan will reenter the fray tomorrow after its three day holiday, and from that point, with the FOMC an afterthought, the focus will center on the weekends G-20 meeting in Pittsburgh.

Upcoming Economic Data Releases (London Session) prior expected