GBPNZD toys with 55p

GBPNZD toys with 55p

By Andrew May (Sales Trader, CMC Markets New Zealand)

The New Zealand dollar continues to outshine its peers pushing US 0.85 and a 30-year-post-float high against the Pound Sterling. The Kiwi has eyed 0.55 with a tenacious fortitude and in all likelihood looks set to cross this level comfortably.

A strong commodity price index and buoyant global dairy trade auction (up 3.1% overnight) pushed the New Zealand dollar upward in an aggressive stoic move.

In Europe, a strong February German ZEW number and fears the British currency is about to lose its 'AAA' credit rating from S&P, provided the catalyst to push the NZDGBP to within the 0.55 target range and may do so beyond.

Any weakness in UK employment data tonight or a dovish tone from the Bank of England’s minutes will only add fuel to an already lit fuse pack of the NZDGBP skyrocket. This could see an entrenchment to a 0.5530 support on further post-float momentum.

A nominal attraction to risk profiling for the NZDUSD, with US markets trading well after the Presidents day holiday, saw the Kiwi US cross continue to flirt with 0.85 setting a confident support at 0.8475 and the Dow surpassing a five year high of 14,045. Expect to see this level easily breached when market boards show delectable colours of green further shunning US dollar bulls.

Markets will watch with keen interest a speech by RBNZ Governor Graeme Wheeler to the NZ manufacturer’s employers association in Auckland this afternoon. The speech is expected to address the persistently high exchange rate and the exuberantly high TWI, which has surpassed 77pts and no doubt is causing concern for our belittled exporters. This will be keenly viewed as The New Zealand Dollar could fully move heavily dependent on Mr Wheeler's comments made today.

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