The AUD/NZD pair inclined to cover its previous losses, as the Australian dollar recorded a new all time high verses greenback, supporting the AUD/NZD pair to move to the upside.
The Aussie rose sharply and recorded a new multi decades high versus the dollar after Consumer prices in Australia rose 1.6% in the first quarter after a 0.4% increase in the last three months of 2010; fueling speculation the Reserve Bank of Australia will resume interest-rate increases.
Furthermore, the U.S. dollar fell against other majors, on the expectation that the Federal Reserve Bank is on the way during the FOMC meeting to continue supporting the U.S. economy.
The focus remains on the Federal Reserve later today and the effect the comments from Bernanke will have on the market and accordingly affecting the pair according to aussie and kiwi’s moves versus greenback.
In New Zealand early Thursday which is today at 21:00 GMT, the Reserve Bank of New Zealand will announce their rate decision with expectations the bank will keep rates steady at 2.5%. Any dovish comments from the bank if seen will weaken kiwi further on reduced monetary tightening bets versus aussie that just attained a strong boost from the CPI. High volatility is to remain with the data on the queue for release.
Originally posted here
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