Quote:
Originally Posted by bonajab
Could the Kiwi decline beginning in March have be predicted? I did a little research and from what I gather New Zealand is going to lower tax and interest rates to stimulate its economy. So, I guess New Zealand's economy has been slowing. A slowing economy means less capital flow. Also, did it signal future possible rate cuts? Basically, I don't know if it would have been possible. If it were, knowing what I know right now, I wouldn't have caught it.
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Hi Bonajab,
These are good questions which are right along the lines of the ones that people should be asking who want to know more about how the fundamentals affect the forex market.
It is obviously pretty easy to point these things out in hindsight and if you look at the chart now you will see that the market rallied significantly from the levels it was trading at when the original chart was put up. From a fundamental standpoint people would attribute this partially to an increased appetite for the carry trade amount other things.
The best thing that I can recommend here is to pick a currency pair (I recommend the EUR/USD simply because there is so much news on it) and start following the fundamentals of the two countries so you can get a further feel for how things move.
Best Regards,
Dave