By Dan Bell
The NZD/USD opens at 0.8090 after a relatively uneventful night.
Investors are becoming increasingly concerned and cautious about a slowdown in global growth.
Data on Monday showed Japan’s economy grew 0.3% in Q2, well below the 0.6% expected, and this was on top of disappointing trade figures from China on Friday.
Risk assets such as the NZD were also underpressure after an unsourced report Beijing had postponed imminent easing measures.
NZ Finance Minister Bill English commented that the NZ Govt would prefer that the NZD was a bit lower, and that it was a continual challenge for NZ exporters to be profitable with the NZD/USD above 0.8000. This, however, did not have any immediate impact on the NZD.
Some analysts, however, expect the NZD to remain strong, partly due to the expected rise in dairy and beef prices amid the worst drought in 56 years in the US midwest farm belt.
In other news: Italy’s public debt hit an all-time high of almost EUR 2 trillion in June, and Greek Q2 GDP shrank by an annualised 6.2% and is entering its 5th year of recession.
Global equity markets were relatively quiet overnight. US S&P500 index rose 0.1%, and Dow Jones fell 0.30%, while the European & UK bourse fell by similar percentages.
The 19-commodity CRB Commodity Index was fell 0.9%. Oil prices rose in choppy trading, while Gold dropped to USD$1609 per ounce. Copper also fell to USD$7395 a tonne, and were other base metals were also weaker.
The NZD opens at 0.8090 USD, 0.7690 AUD, 0.6555 EUR, 0.5155 GBP, & 63.35 JPY.
NZ Retail Sales figures are released today at 10.45am, followed by Australia Business Confidence at 1.30pm. Euro-zone GDP and US Retail Sales , Business Inventories, amongst other hit the tapes tonight.
In other big news: Valerie Adams silver medal has been upgraded to Gold after the Belarussian ‘winner’ Ostapchuk was disqualified after a positive drug test.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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