Commodity currencies are weaker and apart from that there has been little point-to-point change across the major currencies in the past 24 hours.
After a strong run, commodity prices are generally lower, including a 2-2½% fall in oil prices.
A clear exception was another surge in iron ore prices, up 5.7% to break the $70 handle and reaching their highest level in about 15 months.
The latter didn’t help the AUD which is down 0.7% to 0.7740, albeit this follows a very strong 12% gain since mid-January. A breather has been well overdue.
The NZD is on the verge of breaking back below 0.69 and is currently down around 1 percent, seeing it at the bottom of the leaderboard for the second straight day.
The recent strength of the NZD has led to rising expectations of RBNZ easing, as the strength has come at a time of falling terms of trade.
Citi publishes a daily commodity terms of trade index for NZ and that series has been trending down for much of the year, as NZ’s export commodity prices have remained soft against a backdrop of rising oil prices.
The NZD’s underperformance over the last couple of days has seen the NZD/AUD cross fall a cent to 0.8925.
There’s not much to say about the other major currencies, with movements against the USD all within 0.3%. However, that point to point movement disguises some volatility in EUR and GBP trading around the ECB’s policy meeting.
EUR and GBP initially strengthened against the USD as the ECB offered no new policy measures.
EUR spiked to just shy of 1.14 but currently sits flat for the day at around 1.1290.
Much of the media attention was focused on ECB Chair Draghi’s rebuttal of Germany’s criticism than ECB stimulus doesn’t work. Draghi cited evidence that the experience of negative yields had been broadly positive – low rates were supporting a rise in credit and growth.
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