By Dan Bell
The NZD/USD opens around 0.8070 this morning after briefly hitting an interbank high of 0.814 overnight.
The US central bank announced monetary policy this morning - which in the end was a non-event.
They did not announce any new stimulus measures and didn’t change the outlook for interest rates which they have previously said are on hold until 2014.
They downgraded their overall assessment of the economy but no surprises there given the recent run of patchy data.
They continue to say they will “provide additional accommodation as needed”. This puts more focus on Ben Bernanke’s speech at Jackson Hole (a central banker’s symposium) towards the end of the month.
The US Dollar strengthened after the announcement. Stocks closed the US session down 0.25%. Commodities are mixed with the CRB Index down 0.09% but oil prices up 0.83%.
Fonterra Dairy Trade Auction overnight has seen average prices up 3.5%.
The NZD is mixed against the major cross rates and opens at 0.7715 AUD, 0.6590 EUR, 0.5190 GBP and 63.30 JPY.
Not much to report from New Zealand today. From Australia we get Retail Sales and Trade Balance numbers at 1:30pm.
All eyes will be the European Central bank announcement tonight where market participants are hoping they will lower rates and kick start their sovereign bond buying program.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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