NZD/USD Recovery... huh?

Can someone explain to me why the NZD/USD recovered 80 pips after it was officially announced that their economy contracted by 0.3% in Q1? It matched market expectations, the USD was simultaneously strengthening against other currencies, and the price of gold was also steadily decreasing.

I am clearly still a young grasshopper in the world of Forex. I thought for sure there would be at least a double digit drawdown on this pair. Why on earth did this currency recover so much while flying in the face of these three factors? I'll be checking the news after I post this, so maybe I'll have my own answer, but I'd appreciate an explanation from anyone else. Thanks guys.

 

Looking at the charts again, I guess you could argue that just MEETING market expectations when the pair had come off a 6 month low a week ago isn't enough to drive it lower. Apparently the finance minister made some optimistic comments about the state of the New Zealand economy. Would that impact the currency's price action? God I wish I had Bloomberg TV here...

 

Thin Friday markets and Japanese demand is what I've read.

 

Thanks for the reply. Might I ask where you read that? I didn't find anything about it on a Google News search... Bloomberg.com wasn't any help either.

 

Internal Oanda news feed. Also (obviously) there's some covering going on.

Short the damn thing at 76400 (if it gets there)

 

2008-06-27 05:21:05 MARKET TALK: AUD/USD Climbs In Line With NZD Surge



0521 GMT [Dow Jones] AUD/USD climbs in sympathy with gains by NZD against a broad number of crosses. Sue Trinh, senior currency strategist at RBC Capital markets said NZD has been leading the currency market in Asia, fanned by stop-loss buying. AUD/USD strength also surprising given the atmosphere of heightened risk aversion in global equity markets. Trinh says risk of a reversal for AUD/USD high going into London trade. Resistance at 0.9600, support at 0.9550. AUD/USD now at 0.9586, up from lows around 0.9540 in earlier trade. (JEG)


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(END) Dow Jones Newswires

 

Thanks guys. I will be more careful of profit-taking rallies in the future.

 

Looks like Sue Trinh needs to work on her charting skills. Maybe she meant to say NZD/USD, because the correction I was looking for finally came about about 2:00 AM CST...