By Dan Bell
The NZD/USD held onto recent gains and opens around 0.8360 this morning despite a weaker night for risk appetite across global markets.
US equities are weaker across the board with the Dow Jones Index down 0.67% and S&P 500 down 0.97%.
The EUR has been weaker overnight after the Sarkozy-Merkel meeting offered no new solutions to the EU sovereign debt crisis. There had been some speculation they were going to announce some type of European bond which would see the EU move closer to fiscal unity.
The NZD has had a better night against most major cross rates and appreciated by 0.55% on a trade weighted basis to open around 0.7980 AUD, 0.5800 EUR, 64.10 JPY, and 0.5080 GBP.
Growth data from Germany disappointed with their Q2 GDP coming in at only+ 0.1% against a market expectation of +0.5%.
Commodity prices have also weakened with the CRB Index down 0.1% on the day led by oil prices down 1%.
Fonterra's Global Dairy Index fell 0.9 percent, with an average selling price of $3,660 for wholemilk powder. That followed a 1.3 percent fall in its previous auction
Credit rating agency Fitch affirmed its AAA credit rating for the U.S and confirmed outlook stable.
Today we get NZ Q2 Producer Prices at 10:45.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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