By Dan Bell
The NZD/USD made a high of 0.7649 overnight and opens around 0.76 as risk assets continue to recover from recent over- sold lows.
Investors continue to focus on more positive news supporting the recent relief rally across global markets.
European stock markets finished up across the board. US markets are still open and are currently up 0.3%. Commodities continue to recover with the CRB Index up 0.66%.
US Consumer Confidence bounced back after a 30 month low- posting its biggest one month gain in years.
The AUD/USD has pushed back over parity, trading to a high of 1.0070 while the EUR/USD has been up to 1.3440.
Markets were relieved when Italy managed to issue EUR 7.5 bn in new government bonds. The catch is they have been forced to pay record high yields-with the yield on the 3 year bond at 7.89%. These costs were above the levels at which Greece, Ireland and Portugal applied for international bailouts, so probably not something worth celebrating!?
German 30 year Bunds are trading higher than 30 Year US Treasuries- the first time since 2009- a sign that funding costs across the Euro Zone continue to rise.
As expected, EU Finance Minster’s confirmed Greece will receive the next tranche of bailout funds. We will be watching for any further comments this morning from the EU meeting overnight.
The NZD is continues to push up against the European cross rates and opens around indicative interbank levels of 0.57 EUR and 0.4890 GBP but is marginally weaker against the AUD at 0.7595.
NZ Building Consents are released at 10:45 this morning. From Australia we get Private CAPEX numbers.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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