With a “the NZD is overvalued” on one side and Sabre rattling between North Korea and the US continuing overnight there was really only ONE way the NZDJPY could move. The RBNZ as expected held rates at record low of 1.75% and the statement was less hawkish. The Governor in his press conference suggested that they were slightly more uncomfortable with the level of the NZD than they were in May and that a rate rise in mid-2018 “seems too early”. Which is central banker speak for the NZD is too high and we will continue with our policy for the medium term. The kiwi lost ground – USDNZD fell from yesterdays high over 0.7372 to trade as low as 0.7261 AUDNZD is spiking to 1.0834 from lows of 1.0710 and the NZDJPY lost over 1.1% and traded under 79.90 before recovering back over 80.00. This is a key support level on the higher time frame Daily chart and should provide some rest bite as we move into the European session. Politics and fundamentals continue to drive the August markets.
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