By Dan Bell
The NZD/USD opens around 0.7960/0.7980 as EU related risk aversion brings the Kiwi back down to earth.
Spanish government bond yields reached record highs after over 7.2% after Spain's Valencia region said it would seek central government help to repay its debts, raising concerns the euro zone's fourth-largest economy may be forced to seek a full-scale international bailout.
There was also an article in one of the German newspapers that the IMF is considering ending their support of Greece - the ECB announced on Friday that they would no longer accept Greek bonds as collateral - one of the smaller credit rating agencies - Eagan Jones cut Spanish government debt to junk status.
Global stocks were down across the board. The S&P 500 finished down 1.01%.
The NZD continues to trend up against the EUR and opens at 0.6560 this morning. Against the other major cross rates we open at 0.51 GBP, 0.7685 AUD, 62.40 JPY.
Nothing to report from NZ today. From Australia we get PPI figures at 1:30pm.
The focus this week will be the RBNZ on Thursday. No change to the OCR at 2.5% but watch comments for further clues.
Offshore we get Chinese Flash Manufacturing PMI tomorrow and watch for further pressure on Spain.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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