By Dan Bell
After making a new six month low of 0.7636 in the early European session last night, the NZD/USD recovered to make a high of 0.7800 overnight and opens around 0.7760/0.7790 this morning.
Global markets have stabilised overnight on hopes European policy makers will pull out all stops to stem the ongoing crisis across the region. ECB members appear more supportive of increasing the bailout facility but they still need the support of the 17 EU nations. Germany votes on the bailout fund this week on Thursday night.
Global stock markets have had a better night with European equities up 0.5-3% while US markets are currently up 1.5-2.2%.
Gold prices were slammed again overnight falling 2%- even gold is not immune to the recent sell off in global risk!?
Other commodity prices have firmed with the CRB Index up 0.4% led by oil prices up 0.5-1%.
The NZD has had a mixed night against the major cross rates and opens at current indicative levels: 0.7930 AUD, 0.50 GBP, 0.5760 EUR, 59.50 JPY.
No local data to report today. Positive sentiment from a stronger US equity market should provide support to the NZD over the course of the day but markets remain fickle and volatile.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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