By Dan Bell
The NZD/USD is weaker this morning and opens at 0.8160/0.8180 after hitting a low of 0.8146 overnight.
China shares tumbled over 2.5% yesterday afternoon with the Shanghai Index off 2.65%. News that China's Jan-Feb cement production slowed to 4.8% year-over-year from 7.0% year-over-year in December and warnings of weaker profits from some of the largest Chinese companies weighed on Chinese stocks.
Month and quarter end repatriation flows to Japan may also be weighing on ‘carry trade’ currencies like the NZD and AUD as Japanese investors bring funds back home and unwind positions before the end of their financial year on the 31st March.
The NZD hit a new 6 month high against the AUD at 0.7880 overnight and opens at 0.7850 this morning as the AUD continues to underperform against most major currencies. Weaker Chinese data and speculation that the RBA will be cutting interest rates at their next meeting on Tuesday 3rd April have weighed on the AUD- which is still trading close to multi decade highs against most major currencies.
Against the other major cross rates the NZD is weaker and opens at 0.6120 EUR, 0.5130 GBP and 67.50 JPY.
US stocks are weaker overnight with the S&P 500 down 0.67%. Commodities have been hit harder with the CRB Index down 1.26% with Oil prices off 1.76% and Copper -2.11%.
US Core Durable Goods orders came in as expected at +2.2% for Feb.
On the local front we get NBNZ Business Confidence numbers this afternoon.
Offshore the focus will be on US Employment claims and Final GDP numbers.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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