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The Opening Bell: Where currencies start on Monday, September 5, 2011

Currencies
The Opening Bell: Where currencies start on Monday, September 5, 2011

By Dan Bell

 The NZD/USD made a high of 0.8544 on Friday night before US Employment numbers came in worse than expected sparking recession fears and causing a 2.5% drop in US stock markets. As a result the NZD fell out of favor and dropped over 1% against the USD and opens around 0.8430 this morning.

The US Non Farm Payrolls report showed the US did not add any new jobs in August when the market was expecting 65K new jobs. Numbers in June and July were also revised lower. Unemployment came in at 9.1%.

Commodities were generally weaker across the board as a result of the weaker US jobs number with the CRB Index down 0.76% although Gold and Silver prices rallied on safe haven demand.

The NZD is stronger against the EUR as concerns in Europe continue, trading to a high of 0.5998 on Friday night. Against the other major cross rates we open around 0.7950 AUD, 0.5217 GBP, 64.86 JPY.

On the local data front this week we get Fonterra auction results on Wednesday morning and Manufacturing Sales numbers on Thursday. We get a raft of news from Australia with the RBA announcement on Tuesday, GDP on Wednesday and Employment numbers on Thursday.

Offshore it’s a US public holiday today (Memorial Day), the Bank of England and European Central Banks announce interest rate policy this week (Thursday night our time).

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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here

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