By Dan Bell
The NZD/USD has been under pressure overnight and opens at 0.8130/0.8145 this morning.
Weaker than expected PMI’s from Europe and news that the Dutch Prime Minster has tendered his resignation following the failure of budget talks led to broad risk aversion through the European session with equities slammed across the board - FTSE down 1.85%, German DAX -3.36%.
The AUD/USD dropped under 1.03 at one stage while the EUR/USD made a low of 1.3103.
US markets followed the negative tone set by Europe with the S&P 500 Index down almost 1.5% at one stage.
In the last few hours US equities have stabilised with the Dow Jones Index finishing down 0.79% and the S&P 500 -0.81%.
The NZD is weaker against most major cross rates and opens at 0.5040 GBP, 0.6180 EUR, 65.90 JPY and 7880 AUD.
The focus today will be on Aussie CPI numbers at 1:30 NZT. A weaker CPI pretty much guarantees a rate cut from the RBA at their 1st May meeting - i.e.: anything less than 0.8% for the quarter.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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