By Dan Bell
The NZD/USD opens around 0.7560 this morning after making a new six month low of 0.7520 over the weekend.
It has certainly been all doom and gloom over the last few weeks. The potential for a Greek exit from the EU and the implications for global credit markets remains the key concern.
The US Dollar has been the safe haven currency of choice amongst global investors as capital preservation remains the name of the game.
The 10-year yield on US government treasuries fell to a low of 1.68% on 17th May as investors bail out of ‘risk assets’ and into US bonds.
If the world doesn’t fall off a cliff investors will eventually get impatient receiving a negative rate of return on US bonds (after accounting for inflation), so watch for a bounce in the Kiwi at some stage.
The G8 meeting came and went with little impact. Global equities were weaker again with European stocks down across the board. US equities suffered a similar fate with the S&P 500 down 0.74%.
The NZD is weaker against the major cross rates over the weekend and opens around 0.7690 AUD, 0.4790 GBP, 59.90 JPY and 0.5930 EUR.
NZ Visitor Arrival numbers and Credit Card spending released today. Not much to report offshore.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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