Late on Friday I spoke with HiFX Senior Dealer Dan Bell about the week's currencies and markets action in our 'Never a Dull Moment' report, including news from the US Federal Reserve that interest rates will stay near 0% until late 2014 and growing talk of another round of Quantitative Easing (QE) in the United States.
We also discussed the continued problems in Greece and the prospect for another huge round of lending by the European Central Bank on February 29 when it opens up its Long Term Refinancing Operation (LTRO) again to lend as much as €1 trillion to European banks for 3 years at around 1%.
The LTRO has calmed down European bond markets for now, although the loans do have a three year timeframe, unlike the US money printing.
"It's the ECB's way of money printing, similar to what the US has been doing in the last year or so," Bell said.
Markets are also focused on Greece, which remains a basketcase, he said.
Bell also pointed to the key milestones for markets in the coming year -- European elections.
French Presidential elections in April and May will be closely watched, as will elections in Greece in April.
Bell also looked at the likely trading ranges for the New Zealand dollar against the US dollar, the Euro, the British pound and the Australian dollar.
He talked about the likelihood of a rate cut in Australia later on Tuesday.
Bell was speaking before better-than-forecast US jobs data was delivered late on Friday night.
Dan Bell is the Senior Dealer at HiFX, a UK-headquartered foreign exchange dealer with significant operations in Australia and New Zealand. It has a dealing room in Auckland. See more detail here.