By Dan Bell
The NZD/USD opens around 0.8150 this morning tracking recent movements in the AUD following yesterdays surprise 50bps rate cut from the RBA.
The market had expected the Reserve Bank of Australia to cut rates by 25bps at yesterday’s meeting- so the 50bps rate cut taking Australia’s cash rate to 3.75% was a surprise to most- and saw the AUD/USD drop from 1.04 to 1.03.The AUD/USD has found support at the 1.03 level and opens around 1.032 this morning.
The NZD/USD followed the AUD lower but managed to find support around the 0.8120 level overnight.
The NZD is weaker against the European cross rates and opens around 0.5020 GBP and 0.6150 EUR while the NZD/AUD cross rate has strengthened from yesterday’s lows around 0.7830 to open this morning around 0.7885.
Offshore markets were reasonably quiet with Europe on holiday for May Day.
US stocks are trading firmer on the day with the S&P 500 up 0.56% after better US ISM Manufacturing data came in stronger than expected (highest level since June 2011) giving sentiment a boost.
Fonterra Global Dairy Trade auction this morning has seen prices decline 2.4%.
Not much to report on the local front today. From China we get HSBC Manufacturing PMI at 2:30pm. Tonight the focus will be on US ADP Employment Numbers which are seen as a precursor to this Friday’s official Non Farm Payrolls number.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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