Source : Bloomberg The Reserve Bank is set to ``strike again'' in the currency market to curb gains in the country's exchange-rate, according to UBS AG, the world's second-largest foreign-exchange dealer. ``The first intervention was a shot across the bow,'' Adam Myers, a currency strategist at UBS in London, said yesterday. ``They'll strike again. They will move the market a lot further if they intervene a second or third time.'' Good to know what UBS´position is in NZD...
Because it's about liquidity. They need less ammunition in a market that is rather illiquid. Betting against a central bank that has made it's position known is pure foolishness, especially when that bank has proved it is willing to act on it's position. Go ahead, try to be a hero. This is a zero sum game and I'll be happy to take your money.
Is this really your conviction concerning central bank interventions ? Most probably market players like George Soros and others made a fortune because they were afraid of central bank intervention ? If you take into consideration that Japanese investors are already invested with 17 billion NZD in bonds, does a couple of Millions by RBNZ intervention impress you ? Illiquid markets ? You don´t have a clou about how fast market liquidity is there if it is "needed"...
So what about some out of the money put options ? Maybe you´re making a fortune with the help of RBNZ !!???
THEY ARE SELLING THEIR OWN CURRENCY...the printing press means they have unlimited supply...this situation is nothing like 1992