By Dan Bell
The NZD/USD continued to rally on Friday night to make a 3 month high around 0.81.
The USD is weaker against most major currencies with the EUR/USD trading over 1.23 and the AUD/USD over 1.045.
The key driver over the last few days has been increased expectations of additional stimulus from the European Central Bank.
Recent comments from EU policy makers suggest more support for unconventional measures to bring down Spanish and Italian bond yields which has supported risk sentiment across the board.
Global stock markets and commodities rallied on Friday night with the S&P 500 up 1.91% to 3 month highs and the CRB Commodity Index up 0.72% led by oil prices up 0.83%.
The NZD has been one of the best performing currencies overnight and opens at current indicative levels: 0.7730 AUD, 0.6570 EUR, 0.5150 GBP, 63.50 JPY.
From NZ we get Building Approvals this morning and NBNZ Business Confidence tomorrow.
We have a huge amount of market moving news from offshore markets this week. On Wednesday we get China Manufacturing PMI data - on Thursday morning the US Central Bank FOMC statement- the Bank of England and European Central Bank announcements on Thursday night NZT.
The ECB will be closely watched given recent comments from President Mario Draghi. On Friday night we get the US Employment Report which is always a big focus.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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