The NZ dollar saw a grinding outperformance of the Japanese Yen throughout last week. Once the pair broke through the initial resistance at 86.00, the move to test 88.00 was relatively quick. This week has seen the pair consolidating at its elevated current levels and the topside resistance at 88.00 remains the primary target in the short term. Of initial focus will be the BOJ’s monetary policy announcement a little later on today. Expect no change to policy settings, but as usual the accompanying statement will be closely monitored. The RBNZ announcement on Thursday will then become the focus, and we can expect the NZD to remain in demand ahead of announcement, albeit further moves higher should be contained by on-going fears over economic stability in China. Current levels could well prove to have offered good value buying of Yen over the medium term.
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