By Dan Bell
The NZD/USD opens at 0.7975 this morning. It has ranged 0.7966 to 0.8015 the past 24 hours in relatively lacklustre US Labor Day holiday influenced market.
The EUR/USD, and by implication the NZD/USD, held steady, supported by expectations the European Central Bank will detail plans to stem the EU debt crisis. However, both currency pairs are vulnerable to the risk of disappointment.
The AUD/USD hit a fresh 6-week low yesterday after weak economic data from China (manufacturing) and Australia (retail sales, index of commodity prices, amongst others). The NZD/AUD moved back towards 0.7800 consequently.
Another Spanish region, Andalucia this time, requests a bailout. This is the 4th region to do so.
EU data showed manufacturing has contracted for the 13th consecutive month, with no turn around insight.
Global equity markets were higher on the day. The US equity indices up circa 0.6%, while the European markets moved 0.8% higher. The Shanghai Composite Index (SSEC) was climbed 0.6%.
Oil prices rose 1.0%, while Gold climbed slightly to USD$1692. Copper prices rose 0.4% to USD$7,650 a tonne, and other base metals prices stronger - Nickel surged 1.5% higher reversing recent losses.
The NZD opens at 0.7975 USD, 0.7780 AUD, 0.6330 EUR, 0.5025 GBP, & 62.45 JPY.
NZ commodity prices are released at 1.00pm today, followed by Australian Current Account at 1.30pm and then the Reserve Bank of Australia cash rate decision – rates expected to remain at 3.50%.
The all important US non-farm payrolls hit the tapes on Friday night, however before that the EU and China will be centre stage.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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