In a world of low and lower rates, New Zealand stood out Wednesday for a pledge to hike rates. Overall, it was a day for substantial risk aversion with the yen leading and Aussie lagging. Up later, AUD stays in the spotlight with jobs report. Ahead of tonight's Nov Aussie jobs report, the Premium Insights have 2 AUDUSD longs, and other existing trades in EURUSD, GBPJPY and gold.
New Zealand is among the strongest developed economies and even the strong New Zealand dollar won't keep the RBNZ from hiking rates in early 2014. Wheeler held off hiking the OCR beyond 2.50%, as expected but forecast 225 bps of hikes in the next 2.25 years. No other developed country is on that kind of path. NZD is vulnerable to risk aversion and short-term whims in the market but it's extremely well positioned for long-term gains.