By TraderVox.com
Tradervox.com (Dublin) – As the Federal Open Market Committee meets today, speculation of an announcement to commence bond buying program have mounted, boosting risk appetite in the market. South pacific dollars have, in turn, advanced against most of their peers. The New Zealand dollar and its Australian counterpart advanced against the US dollar as Moody’s Investor Services warned that it would review the US rating to AA1 if there were no policies passed to ensure economic growth in the country. The kiwi strengthened as Fitch Ratings indicated that the AA status for the country is under no risk as the country has a strong governance and business environment.
According to Camilla Sutton, who is the Chief Currency Strategist in Toronto at Bank of Nova Scotia, indicated in a emailed statement to clients that risk aversion is limiting the Australian dollar’s advance while the advance by the New Zealand dollar is as a result of affirmation of the country’s AA status by Fitch Ratings and the declining risk sentiments. Kiran Kowshik and Steven Saywell who are renowned currency strategists in London at BNP Paribas SA, indicated that the firm has increased bets the greenback will weaken against the New Zealand dollar, predicting that it will drop to 84.70 cents against the New Zealand dollar.
The kiwi appreciated by one percent against the dollar to trade at $1.0434 yesterday in New York after it advanced by 1.1 percent to its strongest level since August 23 of $1.0449. The currency rose by 0.3 percent against the yen to trade at 81.15 yen. Kiwi gained by 1.1 percent to exchange at 81.74 US cents after reaching its August 7 strongest of 81.95 cents; it advanced by 0.4 percent against the yen to exchange at 63.56.
Steven and Kiran advised that the NZD/USD pair will catch-up with the equity performance in the markets as the kiwi stands out in the positioning perspective.
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