After weeks of steady declines, some investors are choosing to reinvest in the dollars of Australia and New Zealand, according to Bloomberg.
The South Pacific currencies have been hurt primarily by the strong risk-off atmosphere created by the ongoing debt crisis in Europe, particularly as concerns mount that Greece might be forced to leave the euro zone.
But some investors think that this downward trend was carried too far.
"The markets have been excessively pessimistic," Kengo Suzuki, a foreign-exchange strategist at Mizuho Securities Co., told Bloomberg. "We’re seeing some buying back in the aussie and kiwi because they’ve been falling too rapidly."
Despite a slightly disappointing report about New Zealand's budget surplus, news from China suggests the country – a major trade partner of both South Pacific countries – could soon implement new economy-spurring policies.
Around 10:46 a.m. Thursday, the aussie and the kiwi rose 0.38 percent and 0.53 percent against the U.S. dollar, respectively.
The day before, Bloomberg reports that both currencies hit their lowest points against the dollar in six months on the back of concerns about Europe.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
