By Dan Bell
The NZD/USD is weaker again this morning and opens at 0.8160 after hitting a low around 0.8112 overnight.
Global equity markets were also weaker overnight with most European markets down more than 1%.
The US market followed a similar pattern with the S&P 500 down 1% at one stage but in the last hour stocks have staged a comeback and are currently down 0.2% which is providing support to the Kiwi.
Global stock markets seem to have run out of momentum after one of the strongest quarters in over a decade. With the correlation between the NZD and US stocks still in play, the NZD continues to follow the ‘risk on’ risk off’ trade.
Oil prices were smashed overnight- down 2.4% on news that United States, Britain and France consider releasing emergency stockpiles in hopes of bringing down high fuel prices.
The NBNZ Business Outlook survey result yesterday came in much stronger than expected with a net 38.8% of businesses optimistic about their own activity prospects.
The NZD is relatively unchanged against the major cross rates and opens at 0.7860 AUD, 0.6130 EUR, 0.5110 GBP and 67.20 JPY.
Not much to report on the local front today. Offshore the focus will be on the official China PMI data released on Sunday 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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