By Dan Bell
The NZD/USD opens around 0.7870/0.7890 - after trading to a low of 0.78 yesterday afternoon, the Kiwi rebounded overnight to make a high of 0.7915.
Investor sentiment stabilised overnight on hopes of further monetary stimulus from the European Central Bank and the US Federal Reserve.
The EUR rose after the ECB’s Nowotny suggested that the ESM (the European Stability Mechanism) could gain a banking license, enabling the rescue fund to access ECB funds.
US home sales data came in worse than expected supporting growing expectations the Fed will do another round of QE.
US equities finished the day mixed with the S&P 500 down 0.03% and the Dow Jones Index up 0.47%.
UK GDP fell 0.7%in the second quarter (exp. -0.5%), the sharpest fall since early 2009.
The NZD opens at current indicative levels 0.7650 AUD, 0.6480 EUR, 0.5090 GBP, 61.60 JPY.
The RBNZ announce the OCR at 9am this morning - no change expected at 2.5%. Most are expecting the statement to be more dovish (downbeat) given ongoing global concerns.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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