By Dan Bell
The NZD/USD opens around 0.81 this morning as risk aversion drags the Kiwi and other risk currencies down overnight.
The turn in sentiment began in Europe on news that German unemployment unexpectedly rose for the first time in 6 months in April, European Manufacturing Purchasing Managers' Index (PMI) dropped to 45.9 from 47.7 in March-its lowest reading since June 2009 and unemployment in Europe came in at a 15 year high at 10.9%.
US ADP Private employment for April came in weaker than expected at 119K (exp. 170k), the smallest gain in 7 months, after rising by 201,000 in March- has led some to reduce their expectations for this Friday’s US Non Farm Payrolls data.
Global stocks are weaker overnight with the S&P 500 down 0.25% - commodities are also down with the CRB Index -1.26%, with oil prices off 0.75% and copper down -1.45%.
The NZD has been one of the worst performing currencies overnight and opens weaker against most of the majors at 0.7850 AUD, 0.6160 EUR, 64.90 JPY and 0.50 GBP.
The focus today will be on NZ Employment numbers at 10:45 - exp. +0.5%, prev. 0.1% & Unemployment Rate - exp. 6.3%, prev. 6.3%.
Tonight the European Central Bank announce monetary policy and Spain has a 3 & 5 yr bond auction.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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