By Dan Bell
The NZD/USD finished up around 0.83 on Saturday morning after Wall Street closed but has rocketed up to 0.8380 this morning with other risk positive currencies on surprise policy move by China’s central bank.
China's central bank cut the reserve requirement ratio (RRR) by 50 basis points which reduces the amount of cash banks must hold which should boost lending capacity by an estimated 350-400 billion yuan ($55.6-$63.5 US billion).
Euro zone finance ministers are meeting tonight to vote on the Greek bailout. Greece needs the next tranche of bailout funds before 14.5 billion euros of debt repayments fall due on March 20.
US stocks were up 0.2% on Friday with the Dow Jones Index closing at a 6 month high just under the 13,000 level.
CPI from the US came at +0.2% versus 0.3% expected. No inflation in the US to speak of.
The NZD remains firm against the major cross rates. The Trade Weighted Index is sitting at 73.91! Against them major cross rates we open at 0.7770 AUD, 0.6360 EUR, 0.5290 GBP and 66.70 JPY.
Today is a US holiday (Presidents Day) so no ‘same day value’ transactions can be processed. From NZ we get PPI data at 10:45am.
Tonight the focus will be on the EU meeting and Greek vote...the drama continues.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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