The NZDUSD opens lower at 0.8655 this morning.
The NZD remain relatively subdued overnight.
Prices climbed 0.9% at Fonterra's latest Global Dairy Trade auction, while volumes fell 13.6%. Prices had fallen 4.2% at the previous auction.
US consumer inflation rose 0.4% in May for its largest increase in more than 12 months. The NZDUSD fell as the USD strengthened across the board.
The AUDUSD dropped yesterday and overnight after the minutes from the Reserve Bank of Australia expressed doubts on whether they have provided enough economic stimuli to offset slowing mining investment and fiscal tightening. The RBA also stated the AUD$ was high by historic standards. The falling AUDUSD dragged the NZDUSD lower, while the NZDAUD jumped up to 4-week high.
US Fed interest rate decision and accompanying statement will be released tomorrow morning at 6am NZ time. Rates will remain near zero, asset purchases will be tapered a further USD$10 billion per month, and so most focus will be on any indication on when the Fed will start to raise interest rates.
Global equity markets were mostly higher on the day - Dow +0.2%, Nikkei +0.3%, Shanghai -1.1%, FTSE +0.2%, DAX +0.4%
Gold prices fell 0.2% to USD$1270. Oil prices gained 0.4% on the Iraqi turmoil.
The current indicative mid-rates are:
NZDUSD 0.8655
NZDEUR 0.6390
NZDGBP 0.5105
NZDJPY 88.45
NZDAUD 0.9270
NZDCAD 0.9405
NZ Q1 Current Account balance hits the tapes at 10:45am.
US Fed interest rate decision and accompanying statement will be released tomorrow morning at 6am NZ time
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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