The NZDUSD opens at 0.6415 (mid-rate) this morning.
The NZD gapped lower in reaction to yesterdays disappointing CPI data release with the NZDUSD trading as low as 0.6350 before encountering support. This morning the NZD remains under pressure in a risk-off environment as crude oil and equity markets tumble.
Overnight U.S. consumer prices unexpectedly fell, on the back of falling energy prices. The report showed that the consumer price index slipped 0.1% in Dec (exp 0.0%) while housing starts also fell short of expectations, 1.15m (exp 1.19m).
The global supply glut combined with weak demand and a strong USD has seen crude oil prices remain in free fall and with Iran now set to ramp up production, after the removal of sanctions, many investors are positioning their books for even lower prices.
Global equity markets are sharply lower on further concerns of a worldwide economic slowdown and falling commodity prices led by oil.
Global equity markets are in free-fall - Dow -2.53%, S&P 500 -2.25%, FTSE -3.46%, DAX -2.82%, CAC -3.45%, Nikkei -3.71%, Shanghai -1.03%.
Gold prices are up $18 (2%) trading at $1106 an ounce, WTI Crude has plummeted currently trading down 7% at $26.50 a barrel.
Current indicative rates:
NZDUSD 0.6415 -1.2%
NZDEUR 0.5890 -0.8%
NZDGBP 0.4535 -0.9%
NZDJPY 74.95 -1.7%
NZDAUD 0.9320 -0.5%
NZDCAD 0.9327 -1.0%
Upcoming data releases (NZST):
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10:30 – Business NZ Manufacturing Index
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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