By Dan Bell
The NZD/USD opens at 0.8030/0.8040 this morning- exactly the same levels as yesterday morning.
Risk markets have been consolidating recent gains as we await the European Central Bank on Thursday and the all important Non Farm Payrolls data from the US on Friday (Sat morning NZT)
It’s also 4th July holiday in the US today so the next 24 hours is expected to be quiet (Independence Day).
Analysts expect the ECB to cut its main refinancing rate by 25 basis points to 0.75%, and it may take more "non-standard" measures - such as reactivating its own bond-buying program (LTRO3?) or offering banks fresh liquidity.
Fonterra's Global Dairy Trade auction this morning has average prices down 5.9%. The index has fallen more than 30% since hitting a near four-year peak in March last year as global demand has waned.
The Reserve Bank of Australia kept interest rates on hold yesterday at 3.5%. The RBA made no new comments to rattle the market and most analysts continue to see further rate cuts this year.
Oil prices are up over 4% as Iran threatens to block the Hormuz Straight and Europe has embargoed Iranian oil.
The NZD is relatively unchanged against the major cross rates and opens at current indicative interbank levels: 0.7817 AUD, 0.6370 EUR, 0.5120 GBP, 64.10 JPY.
Not much to report on the local front today. From Australia we get Retail Sales at 1:30pm.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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