By Dan Bell
The NZD/USD opens around 0.7970 this morning after trading to a high of 0.7983 on Friday night.
Risk sentiment was more upbeat following China’s economic numbers on Friday - Q2 GDP came in at +7.6% - a 3 year low but not as weak as some had feared. Although the outcome was in line with expectations, market positing had been more cautious leading up to the release.
Global stock and commodity markets were up across the board with the S&P 500 ending up 1.65% while the CRB Index was up 1.27%.
The EUR/USD reversed off two year lows under 1.32 to close on Friday above 1.3250. The AUD/USD has come off recent lows under 1.01 and opens at 1.0250.
The NZD opens at current indicative levels: 0.7780 AUD, 0.65 EUR, 0.5126 GBP, 63.10 JPY.
It is difficult to read too much into the bullish moves on Friday night. Market positioning seems to have been the key driver more than some fundamental economic development.
Not much to report from NZ today. It’s a holiday in Japan so will be a quiet start to the week. Tonight we get US Retail Sales. Tomorrow we get NZ CPI.
On Wednesday Federal Reserve Chairman Ben Bernanke's gives his semi-annual testimony to the U.S. Congress. Most analysts expect him to reiterate that the Fed would take further easing measures only if necessary but give no indication any such action is imminent which could disappoint QE3 addicts looking for more stimulus and strengthen the US Dollar.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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