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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: gregor_us who wrote (982)3/2/2004 11:46:56 AM
From: Wyätt Gwyön  Read Replies (1) of 116555
 
New Zealand is Virtually Powerless
to sustain any intended effect on the exchange rate

i think it will be pretty easy for them to cheapen the currency. they will act jointly with the Aussies. basically, all they have to do is lower the cash rate. both AUD and NZD are high right now due to leveraged speculators playing the carry trade. take away the carry trade and the specs are left high and dry. it is not like Japan, where there is no interest rate arbitrage, but just a trade surplus supporting the JPY (hence BOJ must use currency intervention instead of rate changes to weaken the JPY).
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