By Dan Bell
The NZD/USD opens at 0.7520 this morning after trading to a low of 0.7480 and a high of 0.7568.
The Budget had no real surprises and nothing to stir FX market participants.
In the long run you have to think offshore investors are going to see NZ’s growth and relatively low levels of public debt quite favourably which should underpin the long term trend in the NZ Dollar.
The EUR/USD continued to weaken overnight and made a 23 month low against the US Dollar on ongoing concerns about Greece and weaker Euro zone manufacturing numbers.
The informal EU summit came and went with little fanfare. In the end the only thing we know is that the EU is hoping a pro-austerity government takes power in Greece. Fingers crossed I suppose!
Second reading of UK Q1 GDP data came in weaker than expected at -0.3% versus exp -0.2%. The Pound has strengthened almost 10% against the Kiwi since the end of Feb - I can’t see that trend continuing with the UK economy in a recession and the central bank expected to print more money.
The NZD is stronger against most of the major cross rates this morning and opens at 0.7707 AUD, 0.60 EUR, 0.4803 GBP and 59.90 JPY.
Not much to report on the local front and reasonably quiet offshore. The market will continue to chase headlines from Europe and any developments in Greece.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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