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27 Mar 2014
AUD and NZD outperforming - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes that low volatility has benefited both the AUD and NZD.
Key Quotes
"Declining volatility is even more evident amongst G10 currencies where short-term volatility has fallen to its lowest level since late 2012".
"In these circumstances, it is not surprising that the relatively high yielding G10 currencies of the Australian and New Zealand dollar have outperformed so far in 2014."
"With conditions for carry trades improving, it is likely to place downward pressure upon funding currencies such as the yen. The New Zealand dollar is also deriving support from elevated dairy prices with the positive impact evident in New Zealand’s latest trade report. The trade surplus widened driven by strong export growth of milk powder, butter and cheese which increased by an annual rate of around 38%. RBNZ Deputy Governor Spencer stated overnight that exporters have adjusted to the high kiwi."
Key Quotes
"Declining volatility is even more evident amongst G10 currencies where short-term volatility has fallen to its lowest level since late 2012".
"In these circumstances, it is not surprising that the relatively high yielding G10 currencies of the Australian and New Zealand dollar have outperformed so far in 2014."
"With conditions for carry trades improving, it is likely to place downward pressure upon funding currencies such as the yen. The New Zealand dollar is also deriving support from elevated dairy prices with the positive impact evident in New Zealand’s latest trade report. The trade surplus widened driven by strong export growth of milk powder, butter and cheese which increased by an annual rate of around 38%. RBNZ Deputy Governor Spencer stated overnight that exporters have adjusted to the high kiwi."