By Dan Bell
The NZD/USD is trading over 0.82 this morning after a positive night for risk assets and more dovish comments from Fed Chairman Ben Bernanke stir hopes of further QE.
Global equity markets have rallied overnight- with the S&P 500 currently up 1.1% while commodities as measured by the CRB Index are up 0.2%.
The US Dollar is weaker across the board with the EUR/USD trading over 1.33 and the AUD/USD over 1.05.
The catalyst for last night’s moves was mainly due to surprisingly dovish comments from Fed Chairman Ben Bernanke who said the US labour markets remains “far from normal” and that "further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies".
Adding to risk sentiment overnight was a better than expected German IFO Business Climate Index and an article suggesting Germany was prepared to increase the size of the European Bailout fund.
The NZD is marginally higher against the major cross rates and opens at 0.78 AUD, 0.5150 GBP, 0.6150 EUR, 68.00 JPY.
Not much to report on the local front. Offshore the focus will be on US Consumer Confidence numbers and another speech from Fed Chairman 'Helicopter Ben'.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
(Updated with Dow close)
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