As previously mentioned, the RBNZ did indeed raise rates from 2.75% to 3.00%. However, the tone of the news conference to follow was exceptionally dovish, and directed traders to consider that going forward the bank was going to be far less likely to raise rates. The falling inflation rates of the commodity block, have signaled that the heralded recovery may not be ready to materialize.
A good deal of risk appetite will hang in the balance with the German Unemployment data to be released later on in the European session. The US dollar failed to inspire any confidence today as the Durables Goods Orders took a hit, failing to meet expectations.
Will this eventually turn attitudes toward risk aversion and US dollar bullishness again? Only time will tell. But if the German figures are a disappointment, there is far more risk to the downside than to the up.
So we'll see what unfolds over the next several hours, and I'll be back tomorrow with a new update.
Happy Trading,
Bill
bill@thefxtradingmasters.com
www.thefxtradingmasters.com
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