News and Opinion, sponsored by RaboPlus

By Danica Hampton

After dipping below 0.6900 early yesterday morning, NZD/USD managed to push above 0.7000 last night.

Yesterday’s brazenly strong Australian jobs report saw AUD/USD surge more than a cent, from around 0.8770 to above 0.8880. NZD/USD was dragged higher on the coat-tails of the AUD/USD. Australian employment rose a whopping 52,700 in January, well above the 15,000 forecast. The unemployment rate dropped to 5.3%, a vast improvement on the 5.6% forecast and further evidence that unemployment has peaked.

The strong data adds to the case for further tightening from the RBA and market pricing is now consistent with a 50% chance of a 25bps hike at the RBA’s next meeting in March.

(more…)

By Danica Hampton

The NZD/USD has spent most of the past 24 hours consolidating within a 0.6890-0.6970 range.

After storming higher on Wednesday night, NZD/USD seems to have paused to catch its breath. Yesterday’s slightly weaker-than-expected Chinese trade data (exports rose just 21%y/y, worse than the 28% forecast) and rumoured Asian central bank demand for USD provided some headwinds. As such, the NZD/USD dribbled lower through our afternoon.

Overnight, speculation about a Greek rescue package continued. While investors hope Europe will step in a bailout Greece, it’s difficult to know how quickly (and in what form) a rescue package could be implemented. Officials have adamantly denied that an agreement has been reached and the cost of insuring Greece debt rose again last night (1-year sovereign CDS spreads climbed 67bps to a fresh high of 701.6bps).

(more…)

By Danica Hampton

The NZD/USD has staged a bit of a recovery over the past 24 hours. After falling below 0.6820 yesterday morning, NZD/USD managed to push above 0.6950 last night.

Once again, debt issues in Greece stole the limelight. However, instead of imposing doom and gloom, investors were cheered by media reports suggesting European policymakers had made an “in principle” decision to rescue Greece from its debt troubles. Investors hope that official assistance for Greece will help stop the debt crisis from spreading elsewhere in the world. While European equities were flattish, Wall Street has rebounded strongly. The S&P500 is currently up 1.6%.

Against a backdrop of strong equities and improving risk appetite, the USD was sold heavily as investors trimmed back safe-haven positions. EUR/USD spiked sharply from sub-1.3700 to nearly 1.3840. While the generally weaker USD helped NZD/USD grind higher last night, the fresh 5-month lows also encouraged a bit of demand from a wide variety of local real-money accounts.

(more…)

By Danica Hampton

The NZD/USD shuffled sideways last night, within a 0.6850-0.6925 range.

Overnight, there wasn’t much in the way of fresh global news. Concern about Europe’s debt woes are still simmering away and the weekend G7 meeting didn’t produce any substantial solutions. While European policy makers are adamant the situation in under control, market participants are very still sceptical.

Nonetheless, overnight the cost of insuring government debt in Greece, Spain and Portugal eased a little and European equity markets posted modest gains. EUR/USD rebounded from around 1.3620 to above 1.3700, helped along by rumoured quasi-sovereign demand. While NZD/USD was dragged briefly above 0.6920, the strength didn’t last long. As Wall Street erased its earlier gains and sank into the red, NZD/USD was pitched back towards 0.6860.

(more…)

By Danica Hampton

The NZD was the worst performing currency last week. It tumbled about 2.7% against the USD to a 5-month low of nearly 0.6800.

US non-farm payrolls was the highlight (or perhaps more correctly the lowlight) on Friday night. The US economy shed 20,000 jobs in January (worse than the +15,000 forecast). But the real kicker was the 930,000 worth of downward revisions to the year since March 2009. The soft jobs report cast doubts about the strength of the anticipated US economic recovery.

The disappointing US payrolls report and ongoing anxiety about Europe’s fiscal woes triggered heavy losses across global equities. The Hang Seng fell 3.3% and the DAX dropped 3.1%. At one stage, the S&P500 was down about 1.8%, but a late rally in technology stocks helped Wall Street recover as the night progressed. The S&P500 finished Friday up 0.3%, but down 0.7% for the week.

(more…)

By Mike Jones

The NZD has spent the past 24 hours trapped in a 0.7060-0.7150 range.

The NZD continues to take its cues from offshore. Currency markets were a little choppy overnight as markets continue to assess developments in the troubled European sovereigns Greece, Spain and Portugal.

Early in the night, the NZD was buoyed by strong appetite for ‘growth-sensitive’ currencies from model and technical type players. Combined with the strengthening GBP/USD (UK consumer confidence exceeded expectations in January), this saw NZD/USD squeeze up to an overnight high of nearly 0.7150. But the NZD/USD soon ran out of puff.

(more…)