By Dan Bell
The NZD/USD opens this morning at 0.8010 as the gradual sell off continues.
The markets have a mild ‘risk off’ bias at the moment, on rumours that a 3rd round of ‘quantitative easing’ (ie monetary stimulus) will not be announced at the Jackson Hole central banker symposium.
The EUR/USD & NZD/USD have moved lower in response, with the NZD underperforming across the board.
NZD/EUR, NZD/GBP, and NZD/JPY all hit multi-week lows.
ECB chief Mario Draghi has said the bank need to employ “exceptional measures” which is fueling speculation that it will soon announce plans to buy bonds of the heavily-indebt peripheral European nations in an effort to lower their borrowing costs.
US Q2 GDP figures were revised higher by 0.2% to 1.7% overnight, but the growth rate is still too long to make a sustained dent in the high US unemployment rate. Pending home sales rose in July to the highest level in 2-years.
Global equity markets were little changed. The US equity indices are need unchanged, whilst the European markets were mixed. The Shanghai Composite Index (SSEC) fell 1.0% - giving up the prior days gains.
Oil prices edged lower in choppy trading, while Gold dropped $11 to USD$1655. Copper prices fell 0.8% to USD$7,575 a tonne, and other base metals prices were generally weaker while the Tin price was slammed 5.2% lower.
The NZD opens at 0.8010 USD, 0.7740 AUD, 0.6395 EUR, 0.5065 GBP, & 63.05 JPY.
NZ Building Consents will be released at 10.45am, followed by the NBNZ Business Confidence at 1.00pm. Australian Building Approvals & Private Capital Expenditure hit the tapes at 1.30pm.
The Jackson Hole central bankers symposium kicks off in the early hours of tomorrow morning. The financial markets are eagerly awaiting this event in general, and Chairman of the US Federal Reserve Ben Bernanke's speech in particular.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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