By Dan Bell
The NZD/USD opens around 0.7970 this morning after another positive night for risk assets.
Hopes that Federal Reserve's policymakers will agree on extending stimulus measures fueled a rally in stocks and undermined the safe-haven appeal of the U.S. dollar.
The Fed will announce its policy decision Wednesday afternoon - around 4:30am Thursday morning NZT.
Speculation is rising it could opt for a third round of quantitative easing (aka - money printing) as Europe's troubles pose a risk to growth in the United States. Many analysts expect the Fed to extend its long-term bond-buying through Operation Twist by a few months from the current deadline of June.
The S&P 500 is up 0.98% and commodities are generally higher with the CRB Index up 1.31%.
The AUD/USD has been to 1.02 briefly overnight and the EUR/USD opens just under 1.27.
The NZD is mostly unchanged against the major cross rates and opens at 0.7830 AUD, 0.6280 EUR, 0.5070 GBP.
Fonterra Global Dairy Trade auction this morning which saw average prices down 0.5%. Not a bad result considering prices were up over 13% at their previous auction.
NZ Balance of Payments data is out this morning. Not expected to be a market mover but worth keeping an eye on NZ’s external debt. The key event in the next 24 hours will be the FOMC announcement at 4:30am followed by Ben Bernanke’s press conference at 6:15am NZT.
-------------------------------------------------------------
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.