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The Opening Bell: Where currencies start for Tuesday, May 21, 2013

Posted in Currencies

By Dan Bell

The NZDUSD opens at 0.8170 this morning.

The USD weakened and ‘risk currencies’ such as the NZD & AUD rose overnight as the market pared back expectations that US Federal Reserve Chairman Ben Bernanke will sign a tapering of Fed’s massive USD$85 billion per month bond buying program later this week. The NZDUSD traded as high as 0.8176.

The USDJPY dropped from 4 ½ year highs after Japan’s Economy Minister Amari said that the JPY excessive strength has largely been corrected, and that further JPY weakness could damage the economy (not to mention relationships with their trading partners).

Global equity markets were mixed. Asian & European markets rose while those in the US fell slightly.

Gold prices surged circa 4% higher overnight - its first gain in 8 days - on reported short-covering.

However, the precious metal is still down over 15% for the year. Base metal prices climbed across the board, although concerns remain on their longer term outlook.

The NZD opens at 0.8170 USD, 0.8330 AUD, 0.6330 EUR, 0.5345 GBP, & 83.45 JPY.

NZ Visitor Arrivals hit the tapes at 10:45am, and Inflation Expectations and Credit Card Spending at 3:00pm.

Reserve Bank of Australia Monetary Policy Meeting Minutes will be released at 1:30pm, followed by some US Fed-speak tonight.

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

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