By Dan Bell
After trading to a high around 0.8342 on Friday night the NZD/USD opens lower this morning around 0.8240 / 0.8280.
Concerns in Europe continue to keep investor sentiment fragile with a report that Germany may be delaying the Exchange Stability Mechanism proposal discussions to 2012. U.S. Treasury Secretary Timothy Geithner was in Europe over the weekend urging EU policymakers to leverage their bailout fund to better tackle the debt crisis.
Less than 75% of private sector creditors have signalled they will take part in a scheme to buy back Greek debt which is less than the 90% target agreed by Greece - a shortfall that could jeopardise the euro zone's second bailout package for Athens.
Global stocks finished on a positive note on Friday night with the Dow up 0.66%. Commodity prices were mixed with the CRB Index down almost 1%.
The AUD/USD traded to a high just under 1.04 on Friday night but opens back under 1.03 this morning.
The NZD is generally higher against the major cross rates this morning. NZD/AUD continues to meet resistance around the 0.8050 level- we open around 0.80 this morning. Against the EUR we open back over 0.60 and against GBP we continue to trade in the low 0.5200’s.
The big focus this week will be NZ Q2 GDP (market exp 0.6% qoq) on Thursday and the US Federal Reserve interest rate policy announcement on Thursday morning.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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