By Dan Bell
The NZD/USD raced higher overnight on a surge in risk sentiment to make a high of 0.7950 before profit taking and a weaker finish for US stocks has us trading back under 0.7900 this morning.
Stocks on major world exchanges were headed for their largest daily gain in 16 months and commodities jumped on rising hopes that European leaders will increase the euro zone's rescue fund and tackle the region's debt crisis. The German DAX finished up 5.29% and the FTSE Index up 4.02%. The US markets are still open and were up well over 2% at one stage but are finishing with a weaker tone with the Dow currently up 1%.
While no definite resolution has been announced from Europe, rhetoric from policy makers continues to be more supportive of the enhanced bailout fund.
The NZD is stronger against the major cross rates to open around current indicative levels: 0.7940 AUD, 0.5790 EUR, 0.5030 GBP, 60.40 JPY.
Nothing to report on the local front today.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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