By Dan Bell
The NZD/USD opens at 0.7625 after a whippy night trading. It hit a high of 0.7645 for the second consecutive night, with a low of 0.7577.
The EUR/USD fell to its lowest level in nearly 2 years on further concerns about the ability of Spain to recapitalise its ailing banks and news of another Spanish credit rating downgrade. This initially weighed on risk sentiment and the NZD/USD.
US equity markets managed to shrug off European debt woes and got a boost from news house prices rose fort he first time in 7 months.
The US S&P500 index is 1.1% higher, and Dow Jones up 1.0% on the day. This pulled the NZD/USD back up from the lows.
The 19-commodity CRB Commodity Index is down 0.8% on the day. Oil prices slipped, gold prices fell 1% to USD$1555 per ounce, and copper fell slightly, while other base metal prices were mixed.
However, base metals losses were limited by news China has accelerated approvals for new investment projects by companies and local government to stimulus growth.
The NZD opens at 0.7625 USD, 0.7745 AUD, 0.6100 EUR, 0.4880 GBP, & 61.65 JPY.
NZ Building Consents figures will be released at 10.45am today, and Australia Retail Sales and Construction Work Done numbers hit the tapes at 1.30pm.
We expect risk sentiment to remain fragile and the NZD to subject to sharp movements on ‘headline risk’.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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