By Dan Bell
The NZD/USD opens around 0.82 this morning- relatively unchanged from yesterday despite an improvement in risk sentiment overnight.
The NZD came under pressure overnight after John Key commented that the NZD was overvalued...and has been for a number of years. The reality is Key’s comments will have little impact in the long term – although a bit of jaw boning to give exporters a brief dip is always welcome.
Most global equity markets were modestly higher overnight on stronger than expected retail sales numbers from the US. The Dow Jones Index finished up +0.56% while the S&P 500 closed down 0.04%.
US Retail Sales increased 0.8% in March versus expectations of +0.3% - and follows a 1% rise in February.
Spain’s sovereign bond yields have pushed over 6% for the first time since December and the cost of insuring against a Spanish default is at record highs.
George Soros the well known billionaire warned that the euro crisis could get worse and that the fiscal cuts being implemented across the region is the wrong strategy - “You can grow out of excessive debt, you cannot shrink out of excessive debt.”
The NZD opens weaker against most major cross rates at 0.7910 AUD, 0.6240 EUR, 0.5150 GBP, 65.90 JPY.
Not much to report from NZ today. From Australia the focus will be on RBA Minutes at 1:30pm.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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