By Dan Bell
The NZD/USD opens at 0.8090 after subdued, London holiday influenced, trading.
The USD strengthened modestly overnight on hopes the US Federal Reserve will announce another round of monetary stimulus at this Friday’s Jackson Hole central bankers meeting. This pushed the NZD/USD under 0.8100 level, but not by much.
German business sentiment fell – for the 4th consecutive month. This has increased hopes Germany will now do more to revive the EU’s dismal growth rate.
The AUD/USD slid to a 1-month low of 1.0365 and looks vulnerable to further losses on fresh worries about the state of the Chinese economy.
Global equity markets were little changed, which the exception of Shanghai Composite Index (SSEC) which fell 1.7% and is now at its lowest level since March 2009.
The SSEC and has dropped 16% the past 3-months and is a reflection of slowing domestic growth as well as concerns on the health of China’s major export markets.
Oil prices fell slightly, while Gold hit a 4 ½-month high of USD$1676 before slipping back. Copper prices fell 0.2%, and were other base metals prices were mixed. Iron Ore prices fell again, taking the price drop to 28% so far in 2012.
The NZD opens at 0.8090 USD, 0.7795 AUD, 0.6470 EUR, 0.5120 GBP, & 63.65 JPY.
There is no domestic data is scheduled today.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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