By Dan Bell
The NZD/USD rose for a 3rd consecutive day, hitting a high of 0.7974.
The NZD/EUR continued its recent surge to establish another all-time high of 0.6275, having risen 13% in the past 6 weeks. The NZD/GBP has moved sharply higher in tandem with the NZD/EUR.
The EUR/USD plunged to a 16-month low on concerns that the euro-zone debt crisis will deepen.
There has been renewed speculation about France losing its triple-A sovereign debt rating, coupled with a warning from the ratings agency Fitch of dire consequences if the European Central Bank (ECB) does not take more action on EU’s debt crisis. All is not rosy in Europe and the EUR is likely to remain under pressure.
In other notable news – an Iranian nuclear scientist was killed by a car bomb, an incident Tehran blamed on Israeli & US agents. He was the 4th Iranian scientist to be killed in the past 2 years. This will only serve to inflame the already tense Mideast situation.
Global equity markets were marginally weaker across the board - the US Dow Jones index closed down 0.1%.
The CRB index fell 0.6% - Oil prices dropped circa 1.0%, whilst Gold surged 0.5% higher and presently trades at USD$1640 an ounce), and Copper prices firmed around 1.0%.
There is no first-tier data on the domestic calendar today.
China CPI data will be released today. The ECB has an interest rate decision tonight – no change is expected., and there are Spanish & Italian bond auctions tonight.
Current indicative levels are: NZD/USD 0.7965, NZD/AUD 0.7730, NZD/EUR 0.6265, NZD/GBP 0.5195, and NZD/JPY 61.20.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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