By Dan Bell
The NZD/USD opens around 0.7950 after trading to an interbank high of 0.7984 and a low of 0.7905 overnight.
The US Federal Reserve announced monetary policy overnight. The Fed said it was extending its ‘Operation Twist ‘program by buying longer-dated securities but failed to deliver QE3 which disappointed some investors. The central bank retained its guidance that rates were likely to stay near zero until at least late 2014.
Antonis Samaras, head of Greece’s New Democracy party, was sworn in as PM after Greek political leaders agreed on a coalition that will seek relief from austerity measures tied to international loans. New Democracy will join forces with the socialist Pasok party, which finished third, and the sixth-place Democratic Left. They will hold 179 seats in the 300-member parliament.
The EUR continues to stabilise and opens at 1.27 against the USD - supported by news that European bailout mechanisms - EFSF and ESM, might be used to buy government bonds of troubled EU nations.
The AUD/USD has had another positive night trading to an interbank high of 1.0220 - we open this morning at 1.0190..
US stocks finished marginally lower on the day with the S&P 500 down 0.17%. Commodities were down across the board with oil prices losing 3% to their lowest levels in a year and a half.
The NZD opens at current indicative levels against the major cross rates - 0.78 AUD, 0.6260 EUR, 0.5052 GBP, 63.20 JPY.
On the local front we get NZ Q1 GDP at 10:45am (qoq exp. 0.5%, prev. 0.3%).
Offshore we get Chinese HSBC Flash Manufacturing PMI (prev. 48.4) at 2:30pm. This is survey of approx 400 purchasing managers which asks respondents to rate the relative level of business conditions.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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