It’s been an interesting week for the New Zealand dollar, which started the week on solid footing despite worse-than forecast employment data. Aside from losing ground against a very strong sterling, the New Zealand currency held sure and in some cases gained against its most-traded peers after the figures came out. It lost ground on Wednesday, however, as the central bank Governor announced that should the currency continue to show strength it may have to resort to a sell-off. With New Zealand being so export-reliant, an over-valued currency will begin to negatively impact the economy.
It was strong week for the Australian dollar, which took strength firstly on Tuesday following an interest rate statement in which the central bank Governor suggested that, as the Australian economy strengthens, the next move will be an interest rate hike. The currency logged further gains yesterday as employment figures came in significantly higher than forecast, giving further ammunition to the central bank to go ahead with a rate cut. The South African rand rose to its highest level this year amid market confidence surrounding the upcoming election.
Overnight last night Chinese inflation figures came out in line with expectations and today we look forward to employment data out of Canada.
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