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Daily FX View: NZD Down Ahead Of RBNZ; JPY Up As Stocks Fall

NZD weighed as Fonterra cuts dividend forecast, USD/JPY forms double top around 103.38.

• NZD down vs 21 of 22 major peers
- Risk tonight from RBNZ decision, unanimous forecast for rate to remain unchanged at 2.50% in Bloomberg survey of 16 economists
- At Oct meeting, bank left rate unchanged, said change unlikely during '13, increases likely in '14
- NZD OIS swaps price first rate hike by Mar., Apr. 2014
- NZD/USD -0.62% at 0.8260, session range 0.8257/0.8313
- View: Moving to neutral
- Upward momentum faltering
- Correcting after 3 rallies of similar magnitude since mid-Oct.

• JPY outperforms 21 of 22 major FX peers, helped by falling stocks during Asian session
- Machinery orders for Oct. 0.6% m/m vs est. 0.7%; domestic CGPI for Nov. 2.7% y/y vs est. 2.7%
- USD/JPY -0.35% at 102.48, session range 102.41/102.95
- View: Bearish
- Momentum falling
- USD extends decline after yesterday's close lower, down from marginal new high since May

• EUR higher vs 17 of 22 peers
- EUR/USD +0.02% at 1.3764, session range 1.3741/1.3774
- View: Contrarian bearish
- Forming doji day after yesterday's high since Oct.
- Momentum indicators around overbought levels consistent with tops since Sept. 2012
- 1M imp. vol. rising from low since Aug. 2007

- Risk tomorrow from central bank rate decision
- 22 of 24 forecasts call for rate unch at 4.5%; 2 call for 25bp cut
- View: Bearish
- Failing from test of 2011 high
- Momentum indicators falling

• NOTE: TJ Marta is an FX strategist who writes for First Word. The observations he makes are his own.