By Dan Bell
The NZD/USD record day yesterday halted at 0.8765, but is lower this morning, under 0.8700, as risk sentiment softened due to weak US data, and remaining anxiousness due to the US and European debt issues.
Commodities traded lower also, CRB index down 0.6%, oil leading the move lower -2.2%. The USD index bounced off it low’s to regain previous day’s losses
** Large EVENT RISK at 9.00am – RBNZ’s OCR announcement – market expects no change, so look for any surprises, especially in the statement’s wording **
Australian CPI yesterday +0.9% vs +0.8% expected, saw AUDUSD post a record high of 1.1080. Lessens the likelihood of an RBA rate cut in the short term, saw NZDAUD trade back below 0.7900, key resistance 0.8000.
The NZD opens relatively unchanged against the other major cross rates around 0.6030 EUR, 67.80 JPY and 0.5310 GBP.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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