By Dan Bell
The NZD/USD opens at 0.7945 this morning, having moved down towards 6-week low of 0.7925 overnight.
Softer-than-expected US Manufacturing data, released overnight, further eroded risk appetite, which boosted the USD’s safe haven appeal and resulted in the NZD/USD trading lower.
The European Central Bank (ECB) is expected to announce a bond-buying program to help lower Spanish and Italian borrowing cost after there meeting on Thursday night.
The Reserve Bank of Australia (RBA) kept their cash rate at 3.5% yesterday, and said the AUD/USD was higher than expected given weakening commodity prices and slowing Chinese and domestic growth. The AUD/USD had a short-lived squeeze higher, before turning tail overnight to hit a new 12-week low of 1.0214.
Fonterra’s milk auction prices rose 6% overnight, which is the 3rd consecutive increase. This news did little to support the NZD.
The NZD/EUR & NZD/JPY both hit 10-week low overnight, while the NZD/GBP touched a 12-week low.
Spanish unemployment hit 25.1% - the highest rate in the EU!
Global equity markets were lower on the day. The US equity indices fell circa 0.2%, while the European markets dropped 1-1.5%. The Shanghai Composite Index (SSEC) lost 0.75%.
Oil prices fell 1.2%, while Gold climbed slightly to USD$1,696. Copper prices dropped a little to USD$7,634 a tonne, and other base metals prices were generally stronger – Nickel however plunged 1.6%.
The NZD opens at 0.7945 USD, 0.7770 AUD, 0.63250 EUR, 0.5005 GBP, & 62.30 JPY.
No data on the domestic calendar today, while we get a GDP number from Australia.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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