Forex Flash: Global backdrop likely to support kiwi – BNZ

FXstreet.com (Barcelona) - According to the Research Analyst Mike Jones at BNZ, "We expect the global backdrop to remain supportive of the NZDUSD over the next few months. The recent Obama victory also keeps the status quo intact down at the Federal Reserve. So we'll likely get more asset purchases announced once 'operation twist' rolls off in December. That's another positive for risk appetite, and another knock for the USD."

Yes, the risks from the US 'fiscal cliff' risks are now likely to become more of a focus for markets. "However, at this stage, we doubt the US economy will be allowed to fall off the cliff." Jones notes.

In addition, Greece looks set to secure the next tranche of bailout cash, thereby avoiding the possible mid-November bankruptcy that had started to unnerve investors. Greek lawmakers today approved the latest package of austerity measures. "If the reforms get signed off during the weekend's 2013 budget talks, we may see a small relief rally ripple across risk markets as 'Grexit' risks are priced out again." he adds.