Bernard Hickey talks with HiFX Senior Dealer Dan Bell about the week's currencies moves, including the New Zealand dollar's rise to a post-float high of 83 USc after the Reserve Bank's Monetary Policy Statement and fresh signs of weak growth in America and Australia.
Bell reviewed the Reserve Bank's forecasts for economic growth and market interest rates and how that drove the New Zealand dollar to a record high late in the week.
He looked at comments from Reserve Bank Governor Alan Bollard about intervention.
Bell said the New Zealand dollar reflected moves higher in commodity prices and he did not expect intervention by the central bank in foreign exchange markets.
Bell looked at the European Central Bank's decision to hold interest rates and the strength in the New Zealand dollar versus a weak British pound.
He also reviewed the speech this week by US Federal Reserve Chairman Ben Bernanke and whether it signalled a fresh round of quantitative easing.
Bell pointed to signs the Dow was approaching a critical level at 12,000.
Any break below that could signal a switch to a 'risk off' stance on global markets that could drive the commodity currencies such as the Australian and New Zealand dollars significantly lower.
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.