By Dan Bell
Risk positive currencies have been under pressure with the NZD/USD trading to a low of 0.7915 as a potential Greek referendum on their new bailout package spooks global markets. We open around 0.7930/0.7950 in choppy trading conditions with another 30 mins before the NY close.
A rejection of the bailout deal agreed at last week's European Union summit would jeopardize the next aid tranche to Greece and result in a potential default.
The US dollar index is up over 1% with strong gains against the EUR which opens around 1.37 and the AUD which opens around 1.0330.
The Reserve Bank of Australia cut interest rates by 25 basis points as expected to 4.5%.
The NZD is 1% weaker on trade weighted basis and opens at current indicative levels against the major cross rates- 0.7680 AUD, 0.5790 EUR, 0.4970 GBP, 62.20 JPY.
Global stock markets have been hammered overnight with the German DAX Index down 5% while the US market is down over 2%.
Fonterra milk auction result this morning saw average prices was down 1.2%.
Commodity prices are weaker across the board with the CRB Index off 1.4% led by oil prices down 2% and copper down 3%.
Not much to report on the local front today. From Australia we get Building Approvals at 1:30pm. Tomorrow morning at 5:30am NZT the US Federal Reserve announce interest rates and hold a press conference at 7:15am. US monetary policy continues to be a key driver of currency markets so we will be watching this statement closely.