By Dan Bell
The NZD/USD opens at 0.8230 this morning after trading to a high of 0.8250 and a low of 0.8175.
US ISM Manufacturing data came in stronger than expected adding to the continued run of better economic news from the world’s largest economy.
European (Manufacturing) PMI’s came in weaker than expected. Germany, Europe's largest economy, showed its manufacturing sector contracted last month, and it was a similar story in France.
In Spain, struggling to implement austerity measures demanded by the European Union to meet tough deficit targets, the sector contracted for the 11th month. Manufacturing in Italy shrank for an 8th month.
The EUR has struggled overnight with the EUR/USD off recent highs and opens around 1.3320 this morning. The AUD/USD has also softened from yesterday’s highs and opens around 1.0415.
Global stocks are higher across the board with most European equities up +1.5%. In the US markets finished in positive territory with the S&P 500 up 0.76% - the highest level since the beginning of 2008 - pre Lehman Bros collapse.
Commodities have rallied overnight following the better PMI’s from China and the US- Copper prices up 2.3%, Oil is up 2.14%.
The NZD opens at 0.7890 AUD, 0.6170 EUR, 0.5140 GBP and 67.50 JPY.
On the local front we get ANZ Commodity Price Index at 1pm. From Australia we get Retail Sales at 1:30pm, followed by the main event at 4:30pm- the RBA Rate announcement. The market is pricing in approx 40% chance of a rate cut.
Offshore we get Non-Manufacturing PMI from China which is not as closely watched as the Manufacturing numbers but still worth a look.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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