Forex Blog: Currency Trading News & Analysis.

November 1st 2006

Interest Rates drive Kiwi

The New Zealand Dollar (Kiwi) is still rallying against the world’s major currencies, due primarily to the country’s interest rate climate. Yesterday, I reported that that the carry trade is driving the Yen downwards, as investors short the Japanese currency in favor of higher yielding alternatives. On the other side of the carry trade stands the Kiwi, which is being driven higher by investors in search of yield. In addition, since New Zealand inflation is currently tracking near the top end of the Central Bank’s comfort zone, another rate hike may be in the cards, which would push New Zealand’s base rate to 7.5%. Bloomberg News reports:

There is a 44 percent likelihood of a quarter-point rise in New Zealand’s official cash rate on Dec. 7, when the central bank next reviews borrowing costs, according to an indicator calculated by Credit Suisse, based on trading in overnight interest-rate swaps.

Read More: New Zealand Dollar Rises to Seven-Month High on Rates Outlook

SocialTwist Tell-a-Friend
Posted by Adam Kritzer | in Central Banks, Emerging Currencies | No Comments »

Sponsored Offers

FREE Daily Email Updates

Enter your email address:

Delivered by FeedBurner

Have Questions? Want to Share Your Review?

Be heard. Please share your reviews today!

Neighboring Posts

© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.