Much of this liquidity appears to be coming from China and increasingly Japan where investment trust growth is supplying significant volumes to foreign bonds with little regard to the rising global imbalances that policy makers frequently flag as a risk to the global economy.
Obviously the market was well prepared for a change. Maybe the market is expecting some more calming comments from Fukui.
Based on our sense of positioning, excessively bearish sentiment, and risks that the economy does not slow as rapidly as hoped, we see greater upside potential for New Zealand dollar than further downside in the next month or two.
Recovering equities and still overall strong commodity markets suggests that there is little broad-based concern that central bank policy tightening will curtail global economic growth and there is still adequate global liquidity chasing higher risk assets and capping risk premiums,
The RBNZ has been talking the currency down for over a year and certainly won't discourage further falls. A negative trend in the currency has taken hold and the presumption that the economy will struggle this year, without a much lower currency, will keep it trending lower.
There is some kind of a shift under way, with the large move over the last couple of days testing the bottom of its range for the last year.
This number is quite a shock. This is a short-term negative for the currency and I'm surprised it hasn't fallen further.
The sharp rally in the yen last week may not last. There is chatter about an impending policy tightening by the BOJ, but this is still around six months away at least.
Rate speculation this week has built up a head of steam. This will support the Australian dollar.
Against that, the market has started thinking about rate hikes in Europe in the first quarter of next year. That is going to prevent a large fall in the euro.
A lot of the good news is already priced into the Canadian dollar. It's possible before the year is out that the hurricane season will be over, the Federal Reserve will still be hiking rates, and oil prices will come off, helping take some of the juice out of the Canadian dollar.
The yen has been a definite influence on Asian currencies. Korea definitely has one eye on the yen. I suspect Korea would hope the yen would move more than the won.
It's quite difficult to get bullish on the Australian dollar when the U.S. dollar is rising on interest-rate differentials.
It's trading on the back of the energy sector.
Strong cyclical equities are often associated with greater global growth confidence, risk-seeking behavior and a stronger Australian dollar.
The Australian dollar has underperformed because there is a feeling it's past its best days in terms of a high-yielding currency.
The Australian dollar has moved up against all other currencies quite sharply. The market has been wrong-footed by the Australian dollar, as has happened on several occasions this year. You get a few strong numbers in Australia and the market has to turn around again.
The Australian dollar has been dragged down by the New Zealand dollar. Both currencies may well go through several months of under-performance.
The U.S. dollar might grind a little higher as the United States comes back from a long weekend. But I think it is going to be a quiet week.
The Fed is probably going to hold to see how the economy plays out. There's even some concern the U.S. economy had already started to slow down before the hurricane. If that's the case, it's quite bearish for the dollar.
Interest rate expectations will continue to support the Australian dollar.
The hopes were not high for a clear winner based on polls last week, but the poor showing of the CDU suggests the German people were against further pro-business reforms.
The dollar was given a kicker to the downside. Basically it followed the fall in precious metals in New York overnight.
The currency and rate futures markets are pricing in a rate hike by year-end and two by the middle of next year and this is why the euro has strengthened, especially against the yen.
The market has been trading on the hurricane news.
The market is currently factoring in rate hikes toward the end of the year of as much as 50 basis points. That's about right, considering the kind of strong economic numbers we have got out of Japan.
