The NZDUSD opens lower at 0.7720 this morning.
Financial markets were under selling pressure overnight after the World Bank cut its global growth forecasts for 2015 & 2016. This has increased anxiety that the benefits of cheaper oil may be offset by slow growth and deflationary threats.
Global equity and commodity markets suffered, as did the NZD which traded to an 8-day low of 0.7692.
The USD fell after data showed US retail sales posted their largest decline in 11 months, raising questions on the timing of any Fed interest rate hikes.
The EURUSD dropped to a 9-year low on growing expectations the European Central Bank could announce a full-scale government bond purchases.
Copper, often considered a barometer of global demand, plunged 5.5% yesterday, while most other commodities also suffered losses. This weighed heavily on the AUD, and to a lesser the NZD.
Global equity markets were sharply lower on the day – Dow -1.7%, Nikkei -1.7%, Shanghai -0.3%, FTSE-2.4%, DAX -1.3%
Gold prices were little changed at USD$1,238. Oil prices gained 0.5% on the day.
The current indicative mid-rates are:
NZDUSD 0.7720
NZDEUR 0.6550
NZDGBP 0.5070
NZDJPY 90.50
NZDAUD 0.9480
NZDCAD 0.9240
NZ Food Price Index (a component in CPI) will be released at 10:45am, followed by Australian Employment figures at 1:30pm.
Weekly unemployment claims and Philly Fed Manufacturing Index will be released from the US overnight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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