The dollar of New Zealand slipped against the world’s reserve currency on Wednesday after the governor of the Reserve Bank of New Zealand cited the body’s ability to intervene and limit the kiwi‘s increase in value, according to Reuters.
The kiwi has climbed roughly 13 percent thus far this year, spurred by the central bank raising interest rates. Graeme Wheeler, governor of the Reserve Bank of New Zealand, said one option is administering increased sales of the kiwi if it retains its high value.
“If the currency remains high in the face of worsening fundamentals, such as a continued weakening in export prices, it would become more opportune for the Reserve Bank to intervene in the currency market to sell New Zealand dollars,” the central banker told a dairy farmer exhibition, according to The Wall Street Journal.
The New Zealand dollar dropped about 0.5 percent against the U.S. dollar during the midweek trading session.
Thus far in 2014, the kiwi has climbed about a percent against the Australian dollar, according to The Wall Street Journal. The two nations share strong commerce ties.
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.