By Dan Bell

The NZD/USD opens lower at 0.8120 this morning after being pressured by economic worries and Europe’s continuing debt crisis.

Chemical company DuPont posted lower then expected profit, lowered it earnings forecasts and announced 1,500 job cuts. This has caused equity markets to slump (Dow Jones Index is 1.6% lower, while the European bourses were down as much as 2.1%) and comes after heavy machinery maker Caterpillar said yesterday the US economy is slowing faster than expected.

The US economy appears to be slowing despite the US Federal Reserve latest stimulus measures. Some market commentators are now fearful of deflation and that the Fed’s ‘quantitative easing’ programs are being ineffectual.

Spain’s borrowing costs rose, as did that of Portugal and Italy, after credit rating agency Moody’s downgraded five Spanish regions debt.

Business morale in France’s manufacturing sector slumped to 2-year lows, which added to the overall negative risk sentiment.

Gold prices tumbled 1% to USD$1705 an ounce, Oil prices slumped circa 1.4%, and Copper prices dropped 1.3%. Other commodities also fell broadly as the economic uncertainty cut demand.

The NZD opens at 0.8120 USD, 0.7910 AUD, 0.6255 EUR, 0.5090 GBP, & 64.85 JPY.

There is no data scheduled on the domestic calendar today, although RBNZ Cash Rate decision and accompanying statement will be released tomorrow.

Australian inflation data will be released at 1:30pm today, followed by the US Federal Reserves latest policy statement tonight – this will be eagerly anticipated and closely examined.

------------------------------------------------------------

To subscribe to our daily Currency Rate Sheet email, enter your email address here.

-------------------------------------------------------------

Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here