NZD
The New Zealand dollar exceeded the mark 0.7400 against the US dollar for the first time since October 28 in reply to a new jump of stock indices in Wall Street. The American shares growth made investors buy more risky assets as kiwi.
Recovery of the deals activity on merger and acquisition also improved sentiments at the stock markets. Particularly one of the largest food producers in the world Kraft Foods offered to buy control packet of shares from Cadbury PLC confectionary company.
Optimistic sentiments retained in the New Zealand markets, after Fonterra one of New Zealand milk producer leaders reported that it plans to increase farmers’ payments in 2009-2010 season. It is expected that it will bring more than NZD 1 billion to the economy of New Zealand additionally.
However, in spite of some positive factors for NZD, it will likely need some consolidation prior to further strengthening.
AUD
The Aussie climbed versus major currencies during Asian session on Tuesday and as it is expected to rise further in the near term because fundamental economic indicators are still favorable for the Aus. currency.
The government of Australia signaled clearly that it is not worried that the Aussie dollar can test parity level against the US dollar and Australian producers will have to learn how to live with it.
The employment data which is scheduled for release on Thursday remains the main event for the Australian currency, and it is expected that the trading will be volatile as before until data published.
Another proof of the Australian economy growth was received earlier on Tuesday when the National Bank of Australia monthly survey showed that Business Confidence Index in Australia rose by 2 points to 16 points in October.
GBP
Fitch agency warning about that the UK risks to lose AAA rating more than other leading economies beat the pound down.
The pound purchases sharply stopped when one of Fitch representatives confirmed in the interview that Great Britain heads the list of contenders among the leading economies for credit rating decline because of budget deficit problem. Later the agency specified forecast on rating of AAA stays stable and there are no plans to change it.
Meanwhile, data testifying to UK foreign trade deficit swelling could not do harm to pound. The UK foreign trade deficit unexpectedly ascended in September to GBP 7.2 billion versus GBP 6.1 billion in august. The market participants were waiting for deficit will stay almost unchanged.
CAD
The Canadian dollar strengthened further on Tuesday, after sturdy boost on Monday, but the trading volume was insignificant ahead Remembrance Day which will be celebrated on Wednesday.
The Canadian currency greatly moved up on Monday as investors returned to high-profitable currencies after announcement that the Group of twenty countries will remain their stimulate programs untouched. The US dollar index dropped by 1.1% on Monday. It has become the most serious fall since the end of July. Partly this trend continued on Tuesday morning when the prices of such raw commodities as crude oil and gold ticked up for a while. During early deals the Canadian dollar gained against the US dollar the most actively, compared to other currencies.
However, there could be problems with liquidity on Wednesday inasmuch as the bond markets will be closed because of Remembrance Day in Canada and Veterans Day in the USA.
Regards,
Analyst: Vladimir Donin.
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