NZD Tumbles on Dovish RBNZ, UK MPs Vote over the Brexit Process

Markets Calm Somewhat, NZD Tumbles on Dovish RBNZ

The dollar traded higher against all but two of the other G10 currencies. The main loser was NZD, which tumbled after the RBNZ decision (see below), while the currencies against which the greenback failed to capitalize were GBP and CAD.

AUD/NZD — Technical Outlook

AUD/NZD blasted off into the sky during the Asian morning, gaining around 150 pips, which is a lot, comparing to the pair’s average daily trading activity. On its way higher, the rate managed to overcome not only the short-term tentative downside resistance line drawn from the high of February 12th, but also the 200 EMA on the 4-hour chart. Given that the pair is overextended to the upside from the short-term perspective, we might see a bit of correction before another leg of buying.

UK Lawmakers Vote on Plans Over How to Move Forward

The pound was found virtually unchanged against its US counterpart this morning, which means that it traded in a similar fashion against its other G10 peers. It gained the most against NZD, while it gained the least against AUD and SEK. Apart from USD, the British currency traded virtually unchanged against CAD as well.

GBP/JPY — Technical Outlook

Since the second half of February, GBP/JPY has been trading sideways within an approximately a 500-pip range, between the 143.75 and the 148.30 levels. For now, it looks like that the pair could stick around there for a while, hence why we will remain somewhat neutral for now, until we see a clear break through either of the range’s boundaries. But let’s not forget that Brexit developments might affect the pair, so big spikes are possible.

As for the Rest of Today’s Events

Apart from the votes in the UK parliament we also have some economic data and several speakers on the agenda. In the US, the trade balance for January is coming out, as well as the current account balance for Q4. The forecasts have changed and now suggest that the nation’s trade deficit has narrowed somewhat, to USD 57bn from 59.80bn, while the current account deficit is expected to have slightly widened, to USD 130bn from USD 125bn. We get trade data for January from Canada as well. Canada’s deficit is anticipated to have narrowed to CAD 3.5bn from CAD 4.6bn.

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