By Dan Bell
The NZD/USD traded with a softer tone overnight between 0.8235 and 0.8285.
China raised their benchmark interest rates by 0.25 basis points taking their 1 Year Lending rate to 6.56%-the third hike this year as they attempt to curb inflationary pressures.
The EUR underperformed overnight dropping under 1.43 against the USD and NZD/EUR made a six month high over 0.5750.
The NZD remains firm against the major cross rates over 0.7700 AUD, 66.80 JPY and 0.5165 GBP.
The AUD/USD has traded between 1.0650 and 1.0730 overnight.
Despite the news out of China most equity and commodity markets have had a quiet night with European bourses slightly weaker , in the US the Dow Jones is currently up 0.45% and the CRB commodities index down 0.42%.
A 7.9 magnitude earthquake off the Kermadec islands this morning has raised a tsunami alert for NZ and Tonga.
Australian employment data is released today at 1:30 NZT. The market is expecting +15K jobs and unemployment steady at 4.9%.
Tonight the Bank of England and European Central Bank announce interest rate policy- no change from the BoE and +0.25 expected from the ECB taking their benchmark rate to 1.5%.
We also get ADP employment data from the US which is a precursor to the big non farm payrolls data released on Friday night.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
2 Comments
What, no comment about the failure yesterday of our so-called our NZD-commodity "natural hedge"?
...if commodity markets head south and the dollar doesn't follow, it will be a cruel blow while we are still patiently waiting for the export-led recovery to feel like a recovery.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10736820
This is starting to look like 2008 all over again. Could actually be worse since we've done absolutely nothing to diversify our economy beyond ag commodities since then.
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