By Dan Bell
The NZD/USD opens over 0.82 this morning-up a cent from Friday’s lows-with the US Dollar under pressure against most major currencies.
US equities saw modest gains with the S&P 500 up 0.24% and commodities up across the board with the CRB Index up 0.74%.
US Q1 GDP came in weaker than expected at an annualised rate of 2.2%, moderating from Q4’s 3%.
Slower US growth reinforces the view that US interest rates will remain low for an extended period and leaves the door open to another round of Quantitative Easing from the Federal Reserve-all negative stuff for the USD.
Italy had a successful bond auction on Friday night- selling almost 6bn EUR in government bonds which eased ongoing concerns about the European debt crisis.
The NZD opens at current indicative levels- 0.7860 AUD, 0.62 EUR, 65.90 JPY and 0.5050 GBP.
A big week of data kicks off today with NZ Trade Balance, Building Permits and Business Confidence. Tomorrow the focus will be on the RBA’s interest rate announcement where they are expected to cut rates by 25bps.
On Wednesday morning the latest Fonterra Dairy auction will be closely watched given recent weakness, and on Thursday we get NZ Q1 Employment data.
Offshore we get official China PMI data tomorrow. From Europe we get a raft of inflation, manufacturing and employment figures, as well as the ECB interest rate announcement on Thursday. From the US we get employment figures on Friday night-with Non Farm Payrolls expected to come in at +176K.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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