By Dan Bell
The NZD/USD spiked towards 0.7980 overnight before treating to a low of 0.7907.
The EUR/USD reversed its recent direction and climbed higher overnight.
The primary catalysts were:
- Successful in the Spanish and Italian debt auctions
- Disappointing US Retail Sales & Weekly Jobless numbers
- Comments from European Central Bank President Mario Draghi said the supply of cheap money released by the ECB was helping to stabilise the EU banking system and the euro-zone economy. This cheap funding would have also had a positive impact on the above mentioned debt auctions.
- EUR/USD short covering
The ECB and Bank of England both left interest rates on hold at their respective monetary policy meeting.
The BoE opted not to increase its quantitative easing target – this caused the GBP to strengthen modestly.
Global equity markets were marginally stronger across the board - the US S&P500 index currently up 0.2%.
The CRB index is 1.2% lower - Oil prices hit 2-month highs on threats to Nigerian oil output, Gold is 0.5% higher at USD$1648 an ounce, and Copper prices surged 3.0%.
There is no data on the domestic calendar today.
Current indicative levels are: NZD/USD 0.7940, NZD/AUD 0.7680, NZD/EUR 0.6190, NZD/GBP 0.5175, and NZD/JPY 60.95.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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