New Zealand GDP Disappoints

Daily Forex Fundamentals | Written by AC-Markets | Dec 23 09 09:49 GMT |

Markets have shifted into holiday mode, as ranges have become compressed and thin liquidity is dominating price behavior. USD was basically unchanged in the Asian session, with Japan on holiday. Higher Treasury yield in recent weeks have created just another reason for traders to liquidate JPY positions. The USDJPY started the Asian session around 91.80, after the JPY fell the hardest in the earlier USD rally due to better than expected US housing data. The Tokyo holiday made certain that trading stayed light, with a narrow 91.56 to 91.85 range, with rumors of Japanese exports offers around 92.00 capping the upside. EURUSD has found a comfortable intraday range trading between 1.4220 and 1.4280. Greece continues to weigh no risk appetite as Greek 10-year govt yields hit 6% for the first time since March, as Moody's downgraded the their sovereign debt ratings by one notch (the third agency to downgrade). In New Zealand, the Q3 GDP disappointed markets, printing at +0.2% q/q vs+0.4% exp. The y/y figure was -1.3% vs. -1.2% exp. Despite the deviation, the GDP figure highlights that New Zealand is completely out of recession and clearly on the road to recovery. The NZDUSD fell to 0.6972 on the weaker figure but was able to rally back on USD selling. Overall, the growth trend is positive and should support our view that the RBNZ begins tightening in early 2010. Today’s BoE December MPC minutes were originally anticipated to be a non-event. However, after yesterday's weak Q3 GDP was revised up to -0.2% q/q from -0.3% q/q, but below expectations, might now attract some attention. AC Markets http://www.ac-markets.com Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.