Protests Hurt HKD And Hang Seng, NZD Slides
Saxo Bank | Sep 29, 2014 04:08AM ET
- Both the RBNZ and the New Zealand prime minister say the NZD is too high
- The HSI dipped lower and the USDHKD has risen sharply
- The Hong Kong Monetary Authority will intervene to keep the HKD stable
The market are focused on the NZD, the HKD and the Hang Seng Index this Asian session.
The NZD slumped after the Reserve Bank of New Zealand confirmed it sold NZD 521 million in August. According to John Key, the New Zealand prime minister, the fair value of the NZD is just USD 0.65, which is 13% below its present value. RBNZ governor Graeme Wheeler also said last week the NZD remained unjustifiably high.
NZDUSD slumps
The Australian dollar also dropped significantly this Asian session, with the AUDUSD falling from 0.8760 to 0.8705. Next key support lies at 0.8660.
Protest fallout
The USDHKD rose sharply for the third consecutive day, as protests in Hong Kong continued to escalate. The currency pair reached its highest level since this March, at 7.7645. The Hong Kong Monetary Authority has announced it will intervene to keep the currency rate stable and provide liquidity to banking system when necessary.
Hong Kong’ Hang Seng Index (HSI) opened sharply lower at 23399.5 today and fell as low as 23095.8, breaking through its 250-day moving average for the first time since May 14. The index closed at 23678.4 last Friday. It is now 8.9% below its September high.
The EUR and GBP traded quietly this morning, as FX traders await Germany's August CPI, the Eurozone sentiment index for September, UK mortgage approvals and other micro data.
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