By Dan Bell
The NZD/USD opens at 0.8190 this morning after dipping to a low of 0.8151 overnight and continues to find resistance at recent highs around 0.8240.
The NZD has had a great run over the last six weeks - up almost 10% from Dec lows under 0.76 and has been due a correction/consolidation.
The EUR/USD and AUD /USD also came under pressure overnight as investors become frustrated with the lack of progress on Greek debt discussions. The EUR is trading in the low 1.31’s while the AUD is sitting around 1.0588.
There has been talk that Germany is seeking greater oversight of Greek policy making-highlights significant political tensions that will continue to be an issue in Europe this year.
Global equity markets are weaker overnight which saw the S&P 500 down 1% at one stage. In the last few hours US equities have staged a recovery and are currently down 0.2% for the day.
Commodities are generally weaker across the board with the CRB Index down 1.17%.
The NZD remains firm against the major cross rates and opens at current indicative levels: 0.7730 AUD, 0.6240 EUR, 0.5220 GBP, 62.40 JPY.
On Friday night, credit rating agency Fitch lowered the sovereign credit ratings of Italy, Spain Belgium, Slovenia and Cyprus. Italy’s credit rating was reduced two levels to A- from A+. The downgrades follow S&P’s decision a few weeks ago to lower the ratings of nine euro area countries.
NZ Building Consents are released today. Not a market mover but worth a look. From Australia we get Private Sector Credit and Business Confidence this afternoon.
This evening, US Consumer Confidence will be of interest and any further developments on Greek debt discussions. The big one this week is the US Employment data released on Friday night NZT.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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