By Kymberley Martin
NZD
The NZD inched higher over the past 24-hours. It was whipped around overnight by the release of positive US retail sales data, and the US FOMC announcement this morning.
The NZD/USD currently trades around 0.8200.
There was a generally buoyant tone in markets overnight that helped to underpin the NZD. However the NZD dipped lower in the early hours of this morning, after a strong US retail sales release saw the USD surge higher.
The USD also moved up after the FOMC meeting later this morning. This took the wind out of the sails of the NZD that trades around the 0.8200 level currently. Support is now seen at 0.8140 and resistance is eyed toward 0.8250.
The NZD made steady gains relative to both the EUR and the AUD over the past 24-hours. The NZD/AUD currently trades around 0.7810 and the NZD/EUR around 0.6270.
The NZD/EUR is comfortably around the middle of its trading range since the start of the year.
By contrast, the NZD was on a downward path relative a broadly stronger GBP overnight. The NZD/GBP currently trades around 0.5220.
There are no NZ data releases today. However, across the Tasman the Westpac consumer confidence indicator will be released.
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Majors
Risk appetite moved a little higher ahead of the US FOMC this morning. The “risk sensitive” CAD,AUD and NZD were amongst the strongest performers. The USD outperformed the EUR after strong US retail sales data.
Our risk appetite index moved up to 68% overnight. Equity markets put in a solid performance with the Euro Stoxx 50 closing up 1.70% and the S&P500 up 0.90% ahead of the US FOMC meeting. (S&P500 now up 1.30%) The CRB global commodity index rose 0.50%.
The USD has recently been rising in response to positive US data outcomes, as opposed to declining on these outcomes as general risk appetite improves. This occurred this morning after a positive surprise on February US retail sales data. Retail sales-ex-autos rose 0.9% (0.7% expected). The USD index rose to touch above 80.30, before dropping back to 80.00 ahead of the FOMC meeting. After the Fed announcement that highlighted recent improvement in the US economy the USD index recovered to trade around 80.20 currently.
The EUR/USD that had been on a gradual downward path most of the evening dipped below 1.3060 after the US retails sales data. This was despite a solid German ZEW survey earlier in the night that showed forward-looking economic sentiment picked up from 5.4 to 22.3 in March (10.0 expected). The EUR/USD traded at 1.3110 ahead of the FOMC meeting. After the announcement it has dropped back toward 1.3060.
In the backdrop of generally buoyant risk appetite the “risk sensitive” CAD, AUD and NZD were fairly well underpinned overnight. However, they dipped relative to the USD after the retail sales data, before recovering early this morning.
The AUD/USD has dipped back toward overnight lows after the FOMC meeting. The AUD/USD currently trades around 1.0500.
The JPY was the key underperformer ahead of the FOMC meeting. It declined further relative to the USD after the announcement. From around 82.20 last evening the USD/JPY has broken above 83.00, its highest level since April last year.
Tonight we get UK employment data, and Eurozone CPI and industrial production data.
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