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Why Is Sterling Rising?

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Bloomberg (May 2013): Wheeler Sold Kiwi to Weaken World’s Best-Performing Currency

The New Zealand dollar plunged after Reserve Bank Governor Graeme Wheeler said the central bank sold the kiwi and can do so again to protect economic growth.

“There has been some intervention,” Wheeler told parliament’s finance and expenditure select committee in Wellington today, driving the New Zealand currency down as much as 1.1 percent to 83.60 U.S. cents, the lowest level since April 1. The central bank last confirmed a currency intervention in June 2007, when it sold New Zealand dollars.

“The kiwi has been the flavor of the month and Governor Wheeler would like the market to choose a new flavor,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. (WBC) in Sydney... (cont)

Edited by Nuggets Mahoney

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If the markets werent 100% rigged, the Central Bankers could take 100% of the time they work......OFF.

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If the markets werent 100% rigged, the Central Bankers could take 100% of the time they work......OFF.

Done very nicely over the recent rise in cable and EURUSD thanks very much. Both are now encountering some resistance however.

Not sure how the OP can say £ is getting higher. It was a heck of a lot higher at the beginning of this year, and has taken six months to retrace 50% of that high (from a low in February).

Recent favourable HPI data, showing modest rises help the bullishness towards cable.

Some technical reasons for the rise too as the Daily 100/200 bar moving averages came into sight they became targets for traders, being resistance at first and then becoming support. Cable is currently trading "between the goalposts" of the Daily 100/200 MA.

With the 200MA just 100 or so pips away, I think its likely the market will make another attempt to push it higher (even though it will more likely fall a bit in a consolidation phase first).

However the recent rises are also certainly due to current weakness over the dollar. Economic data recently hasn't been so good and uncertainty about the continuance of the Fed's bond purchase program. The Fed is the biggest market mover of all.

The Aussie Dollar is more complex. Some announcements it was over valued, worries about its economy as the mineral boom might be leveling off as China slows, with the complication that minerals are priced in USD.

Sadly FX and stock prices don't move in straight lines. Its up a bit, down a bit, then up a bit more and vise versa. A bit like house prices.

Edited by Secure Tenant

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import figures were significantly lower than expected the other day

Lower export is cause. Resulting in lower imports partly from lack of dosh from export, and compounded by increased import costs to the proles from reduced currency strength.

Or something. ;)

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China's SHIBOR (LIBOR equivalent) curve became sharply inverted on Friday on rumours that several banks are about to fail. PMI figures are also barely +ve. A spike in short-term rates is the last thing the Chinese economy needs right now as that will dampen lending and suppress growth even more. Looks like they're in trouble.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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