Australian Dollar/New Zealand Dollar and Yield Curves
If New Zealand dollar/U.S. dollar and Australian dollar/U.S. dollar follow their own bond prices during New Zealand and Australia trading, which way will Australian dollar/New Zealand dollar move? This pair is the yield seeker.
Currency pairs must be viewed as not only trading mechanisms to profit, but mechanisms for finance. Currency pairs configured as New Zealand dollar/U.S. dollar and Australian dollar/U.S. dollar only satisfy one side of the finance equation. This was the reason for inventing these cross pairs. Australian dollar/New Zealand dollar allowed for the flow of funds to travel either inside Australia or New Zealand from abroad or it was used as a cheaper mechanism to finance ...
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