If you are like me, you cannot wait for the elections to be over so that we can actually concentrate on the U.S. economy again and not on politics. If you are like me, you also wouldn’t like to be heavily-exposed to the dollar in the run up to the elections. This is when some FX crosses come handy. One such pair is the NZD/JPY, though it is not entirely immune to U.S. elections, for it is considered to be a risk-sensitive FX pair.
The New Zealand dollar’s recent advance has come to a halt recently after the Reserve Bank of New Zealand suggested that interest rates may need to be cut further from their current record low of 2.0%. The NZD’s retreat has been particularly noticeable against the Australian dollar as the AUD/NZD pair has surged back above 1.0500 after dipping to as low as 1.0240.
The U.S. dollar is down today, especially against commodity currencies after the recent bounce on gold and silver, and also after the current moves in crude oil. However, we see commodity pairs in corrective waves within bigger USD trend, which is expected to resume this week--but maybe after the Fed rate decison on Wednesday.
Friday’s incredibly impressive U.S. jobs report sent the U.S. dollar and equities higher, with S&P 500 and Nasdaq ending the week at new record highs. The 255,000 jobs added in July and 292,000 in June, made the markets look beyond the weak release in May of only 24,000 additional jobs.