Xu Yaxin: Good Time For New Zealand Dollar

Statistical charts of China's iron ore, milk and Australian dollar and New Zealand dollar show that the exchange rate of Australia Dollar / New Zealand dollar / dollar is strong because of China's rigid demand for commodities such as iron ore and milk and P.

From the comparison of NZD / USD and milk futures, we can find that they are highly correlated.

With the rise in the price of milk futures, NZD / USD is also approaching the record high of 0.8838.

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< p > < strong > a href= < http://www.91se91.com/news/index_cj.asp > New Zealand < /a > fed: there is still room for raising interest rates < /strong > /p >

< p > in the end of January this year, "the Central Bank of the developed countries that first raised interest rates will spend their homes", pointed out that the most likely should be the New Zealand Federal Reserve.

On the one hand, the New Zealand Federal Reserve has maintained the benchmark interest rate for 2.5% years for more than three years, and with the continuous recovery of the global economy, the fundamentals of New Zealand have continued to improve.

At the same time, New Zealand's high house prices and higher than expected inflation levels may finally prompt the New Zealand Federal Reserve to make up its benchmark interest rate.

Finally, the New Zealand federal reserve increased interest rates by 25 basis points to the current 3% level in March and April respectively.

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< p > I believe that the New Zealand a href= "http://www.91se91.com/news/index_cj.asp" > the Federal Reserve "/a" will continue to raise interest rates in the future mainly depends on two aspects, namely the economic fundamentals and the inflation rate of New Zealand.

The price of New Zealand's exports is still at a high level, and as New Zealand's new immigrants have accelerated the rise in housing prices in the past few years, consumer demand has been raised.

The New Zealand Federal Reserve is expected to have room to raise interest rates from 75 to 100 basis points in the next 12 months.

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The New Zealand Federal Reserve's next interest rate conference is June 11th. I expect that if the economic data and inflation do not go too far, the probability of raising interest rates by 25 basis points in June will also be great.

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< p > the unfavorable factor for the New Zealand dollar is that Wheeler, the chairman of the New Zealand Federal Reserve, once said on public occasions that "if the fundamentals of the export price continue to slide, the New Zealand dollar will remain high, which will be more suitable for the central bank to intervene in the foreign exchange market and sell the New Zealand dollar at that time."

The comment came after a short jump in the NZD / USD.

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< p > although Wheeler believes that the exchange rate of the New Zealand dollar is overvalued, it does not have continuity and releases the signal of export head intervention. However, I believe that commodity exporting countries like Australia and New Zealand are far more tolerant of their exchange rate than those similar to industrial commodities like Japan.

After all, the high exchange rate will weaken the competitiveness of domestic commodities, but the commodities such as minerals are more difficult to replace, while industrial goods are very easy to find alternatives.

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"P". Therefore, we will find that countries such as Australia and New Zealand tend to intervene in the market when their currencies are over estimated. In contrast, Japan tends to intervene in the market when its currency is overvalued.

That is to say, Japan is more willing to see its currency depreciation than appreciation, while Australia and New Zealand are just the opposite.

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< p > < strong > NZ / < a href= "http://www.91se91.com/news/index_cj.asp" > US dollar < /a > Outlook: < /strong > /p >

From a basic point of view, New Zealand's economic indicators are relatively stable: the labor market has seen a relatively strong recovery momentum. In the first quarter, the unemployment rate hit a three year low and a record increase in employment. Although there are still some deficits in the current account, the momentum of the trade surplus has steadily risen. Inflation, both producer and consumer price index, is rising gradually. In the real estate market, there is a noticeable bottom up rebound in the construction permit. The rise in the housing price index also implies the steady demand for housing, and there is a steady recovery trend in industrial output and retail sales.

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The economic indicators of the United States are good and bad. The good news is that the economic recovery has gradually entered a virtuous circle, such as consumer spending, consumer confidence, durable goods orders, manufacturing purchasing managers' index, business investment, mergers and acquisitions, employment market and so on. The bad weather has brought many shocks to many economic sectors, such as the first quarter GDP, labor participation rate and new housing construction permit in the United States, P.

Market expectations of the Fed's interest rate increase will affect the performance of the US dollar index for a long time in the future.

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In terms of technology, the exchange rate of NZD / USD is at a relatively high level historically. If the fundamentals of New Zealand do not deteriorate further, with the continuous increase in interest rates of the New Zealand Federal Reserve, it is only a matter of time before a record high of 0.8838 exceeds P.

From the monthly line level, the price linked to the August 2011 high 0.8838 and the April 2013 high point 0.8676 downward trend line once gave the NZD / USD a big suppression, but this year's March's big line has already broken through the level pressure, and has made the very obvious back action in April. If the future price can maintain the above level, then the theory will refresh the record high, and look at the 0.9000 level is still very hopeful.

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