Today both the Australian and New Zealand dollars continued their daily growth against their counterpart from the United States on willingness of the Forex traders to earn from the interest rates difference.
New Zealand dollar is showing a high level breaking growth today against the U.S. dollar after the confidence in the carry trade and other high-risk investments rose on the Fed’s rate cut expectations.
Both Australian and the New Zealand dollars gained today on a presumption that the international investors bought Australia’s and New Zealand’s government bonds as their premiums yield more than their U.S. and Japanese counterparts.
New Zealand dollar rose against all other major currencies after the Reserve Bank of New Zealand left the Official Cash Rate (OCR) - short-term lending interest rate - unchanged at 8.25%. And as it was hinted by Bank Governor Alan Bollard the rate is not likely to be lowered until 2009.
While the Japanese yen is surely a benefiting currency when it comes to the carry trade panic, some currencies feel extremely bearish at the times of global financial instability and other factors that bring down risk appetites. New Zealand dollar is one such currency.