By Dan Bell
The NZD/USD opens around 0.8080/0.8100 this morning after making a low of 0.8067 yesterday afternoon.
The Bank of Japan intervened in global currency markets yesterday (selling JPY to buy USD) which gave the US dollar a boost across the board. The Yen has been trading at historical highs against the USD recently which has been straining their all important export sector.
Global markets are weaker across the board overnight as investors begin to question the efficacy of the new EU bailout package-the MSCI world equity index is down 2.3%, coming off its highest levels in nearly 3 months last week. The S&P 500 is currently down 1.73% while commodities are off 1%.
Market sentiment was dented further by news that MF Global, a large institutional US futures broker has filed for bankruptcy overnight.
Greek Prime Minister George Papandreou on Monday called a referendum on the new EU aid package and said he would ask for a vote of confidence to secure support for his policy which involves significant austerity measures! A survey conducted over the weekend showed 60 percent of Greeks view Thursday's EU summit agreement on the new bailout package as negative so a referendum could throw a spanner in the works!
The NZD opens around current indicative levels against the major cross rates- 0.5830 EUR, 0.7660 AUD, 0.5026 GBP, 63.10 JPY.
On the local front we get labour cost index out at 10:45 this morning. Offshore, China release their manufacturing PMI at 2pm followed by the much anticipated RBA cash rate announcement at 4:30 NZT.