By Dan Bell
The NZD/USD traded down to a low of circa 0.8120 – we have not been below 0.8100 for over 4 weeks – as risk switched once again to the ‘off’ mode.
The awaited Spanish bond auction was successful (raised all the desired funds), but at a higher rate of interest reflecting fears over their economy and banking sector.
Rumours that debt rating agency Moodys may downgrade France’s sovereign credit rating, coupled with disappointing data from the US (existing house sales, weekly jobless claims, & Philly fed manufacturing index) contributed to a ‘risk off’ environment.
The 19-commodity CRB Commodity Index was essentially flat on the day. Oil prices nudged lower, gold prices fell to USD$1643 per ounce, and copper fell slightly, while other base metal prices were mixed.
Equity markets are pushed lower across the board overnight. The US S&P500 currently down 0.6%, while the Dow Jones Index is 0.5% lower on the day.
The NZD opens at 0.8140 USD, 0.7870 AUD, 0.6195 EUR, 0.5065 GBP, & 66.40 JPY.
There is no data on the domestic calendar today. The ongoing mascinations regarding Spanish/European debt woes together with this weekend G20 & World Bank meetings will continue to dictate near term market direction.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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