NZDUSD managed to tread water overnight, sustaining Wednesday night’s bounce from 2 month lows, currently 0.8480.
US stocks traded lower as geopolitical concerns re-emerged. Ukraine’s military pledged to defend its borders in the event of Russia sending troops. The fact that Ukraine did not do so when Russia annexed Crimea makes gives this statement some increased relevance. NATO also weighed in, committing to a response to illegal Russian behaviour.
The nerves didn’t end there, as the prospect of limited military action against ISIS in Iraq became more likely. Western nations have so far not taken any action since militants took control of much of the country some months ago.
Solid US jobless claims supported the picture of an improving US labour market, the key driver of action from the Federal Reserve. Positive data in this sphere remains broadly supportive of the USD.
The European Central Bank left benchmark rates on hold, stating that it is a little too soon to see any fruit in the aggressive easing measures put in place in June. Bilateral sanctions with Russia will do little to buy them any time in this regard. We see more chance of another rate cut soon than they currently suggest.
Current indicative mid rates:
NZDUSD 0.8480
NZDEUR 0.6345
NZDGBP 0.5035
NZDJPY 86.50
NZDAUD 0.9140
----------------------------------------------------------
To subscribe to our free daily Currency Rate Sheet and News email, enter your email address here.
----------------------------------------------------------
Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
Daily exchange rates
Select chart tabs
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.