FX Morning Colour: Kiwi flies as Usd loses some NFP positivity


The standout G10 gainer, with a 1%+ rise vs the Greenback on the appointment of ex-RBNZ Deputy Governor and now CEO of the NZ Superannuation Fund, Orr as new RBNZ chief with effect from March 27th, 2018. The Central Bank’s former Head of Financial Stability is deemed to be less dovish than current acting Governor Spencer, and thus Nzd/Usd has rebounded sharply to 0.6900+ levels again, with option expiries at 0.6915 (circa 200 mn) and 0.6950 (around 325 mn) either side of the current spot price.


Deriving some support from its outperforming antipodean neighbour and from a technical standpoint as support around 0.7500 vs the Usd continues to hold – 0.7522 now trading, but further upside may be capped by option expiry interest between 0.7540-50 (370 mn), and as the Aud/Nzd cross has broken down through 1.0900.


The index is back down through 94.000 and unwinding some of its recent recovery gains, aided by last Friday’s US jobs data, with ongoing uncertainty on tax reforms and a vote on the reconciled proposals now not expected until December 22. 94.000-93.500 is likely to hold as attention turns towards Tuesday-Wednesday’s FOMC meeting.


Benefiting from the Dollar downturn, with Eur/Usd within a whisker of 1.1800 again, having held just above key chart support at 1.1713 las week. However, decent expiries at and just above the figure could figure this session with 1 bn at 1.1800 and 305 mn at 1.1820.


Off recent lows vs the Usd, but with the headline pair remaining firm above 113.30 and bulls eyeing higher levels in a new range. 114.00 is the obvious next upside objective if Usd/Jpy can surpass last Friday’s peak around 113.70.


The G10 laggard, with Cable unable to maintain 1.3400 or above ground on latest Brexit-related uncertainty (Ireland apparently at odds with the UK Government over the legalities of the border agreement), and Eur/Gbp crossing 0.8800 to the upside again. For Cable, 1.3300-1.3450 could capture the range through to Thursday-Friday’s EU Summit (but with eyes on top-tier UK data as well).

11 Dec 2017 - 09:24- Forex- Source: ransquawk

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