By Dan Bell
The NZD/USD has been slammed again this morning and opens around 0.7540 after trading as high as 0.7675 overnight.
The key driver of risk aversion this morning has been comments from former Greek Prime Minster Lucas Papademos suggesting the risk of Greece leaving the EU is real.
In his first interview since leaving office last week, Papademos said that dropping the EUR would have "catastrophic" economic consequences for Greece and profound and far-reaching implications for the rest of the euro zone.
This is why some European states and institutions are considering contingency plans for any eventuality, he said, declining to provide details."Although such a scenario is unlikely to materialize and it is not desirable either for Greece or for other countries, it cannot be excluded that preparations are being made to contain the potential consequences of a Greek euro exit," Papademos said.
Global stock markets started the evening well with most European bourses up 1.5%+. US equities were also trading in positive territory but turned negative after Papdemos’s comments hit the newswires.
The S&P 500 finished flat while the Dow was off 0.01%. Commodities were weaker across the board with the CRB Index down 1.14% - led by oil prices down 1.53%.
The EUR/USD is trading back under 1.27 after trading as high as 1.2817 overnight. The AUD/USD has also been hit hard this morning down from yesterday’s highs over 0.99 to trade as low as 0.9785 this morning.
One of the voting members of the US Federal Reserve Lockhart noted the bar to further QE remains high - adding further support to the US Dollar.
The NZD is mostly lower against the major cross rates and we open at 0.7688 AUD, 0.5940 EUR, 0.4780 GBP and 60.30 JPY.
Not much to report on the local front. Tonight the focus remains on Greece and meeting of EU policy makers.
----------------------------------------------------------------
To subscribe to our daily Currency Rate Sheet email, enter your email address here.
----------------------------------------------------------------
Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
No chart with that title exists.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.