By Dan Bell
The NZD/USD is trading just below 0.8300 this morning, having spiked to a new post-float high of 0.8315 yesterday. The NZD/GBP also established a new-post float of 0.5185.
The EUR/USD leaped to a 3-week high as Greece passed crucial bills to avert immediate default and on expectations that euro-zone interest rates will rise again next week. This also buoyed risky assets such as equities, and commodity currencies such as the NZD.
Greece approved detailed austerity and privatization bills Thursday to secure emergency international aid. However, longer-term dangers continue to lurk with credit default markets pricing in an 80% chance of Greece defaulting within the next 5 years - hence the financial markets will remain highly volatile.
Commodity prices were generally firmer, with Copper up 0.3%, Nickel 1.0% higher, while Gold prices fell. However, Gold is still heading for its 11th consecutive quarterly gain.
Interesting data from the IMF on global central bank reserve holdings: The USD$ share of the $10 trillion global central bank holdings slipped to 60.7% from 61.5% the previous quarter, the EUR share was relatively steady at 26.5% (up from 26.3%), while 'commodity-linked' currencies such as the NZD, AUD, & CAD rose to 4.7% from 4.4%. Even though the % change does not sound huge, it does represent massive amounts of capital and has significant impact on the currencies involved.
Not domestic data of any significance scheduled today, and 4th of July holiday in the US on Monday. We don't expect too much action today on the currency front.
Super 15 semi-finals this weekend. Blues playing the Reds on Saturday, and the Crusaders take on the Stormers early Sunday morning. As hard as it is for a Highlanders supporter to say 'Go the Blues' and 'Go the Crusaders'!
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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