Kiwi Falls, Yen at Three Week Low

The New Zealand dollar once again took the limelight in early Asian trade Tuesday, with the kiwi dropping one percent after the Reserve Bank of New Zealand increased its efforts to impose new controls on a thriving housing market, driving up the possibility of a possible rate cut some time soon.

The yen hovered near 3-1/2-week lows amidst growing expectations of monetary easing by the Bank of Japan and a broad recovery in risk appetite and speculation about M&A-related yen-selling.

The yen traded at 106.20 yen to the dollar, having fallen to as low as 106.33 in early trade, its lowest level since June 24. It is currently supported at its 55-day moving average at 106.34 but a breakout from that level could prompt traders to test its June 24th low of 106.875.

Sterling Up

The British pound rose to 140.77 yen, after bouncing back about nine percent from the 3 1/2-year low of 129.05 yen that it hit following the EU referendum. The pound is steady against most other currencies and traded at $1.3266.

The euro stood little changed at $1.1076 ahead the European Central Bank's policy meeting on Thursday.

The dollar index stood at 96.58, below its July 11 high of 96.793.

Wall Street

Investors are also moving away from their safe-haven bids in the yen now that the shock from last month's Brexit vote wither. U.S. shares are hitting record highs as expectations of near-term rate increases by the U.S. Federal Reserve have dissipated and the Bank of America's quarterly results helped investor confidence going into earnings season.

The Dow Jones industrial average ended about 15 points higher, extending its winning streak to seven days, with a fifth straight day of record closes.

The S&P 500 also ended up about a quarter of a percent at a record high, led by information technology and consumer discretionary sectors.

Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.