By Dan Bell
After finding support at 0.8150 yesterday the Kiwi traded to an interbank high of 0.8220 overnight and opens this morning around 0.82.
Global stocks were weaker across the board - in the US the S&P 500 is currently down 0.27% following a 1% drop in most European markets overnight. Commodities are also lower with oil down 0.28%, gold -0.25% and copper -1.34%.
Interesting to note - copper has risen around 8% since the start of September and hit a 4-1/2 month high at the end of last week - fuelled by a third round of quantitative easing (QE3) by the U.S. Federal Reserve.
Iron ore prices also recovered in September - but are still down over 20% for the year. The big question mark for metal prices going forward is the growth outlook in China - and for the time being it doesn’t look great.
The AUD/USD has traded with a similar range to the Kiwi and opens at 1.02 this morning. The EUR/USD lost ground overnight and opens at 1.2970.
The NZD opens at current indicative mid rates: 0.8037 AUD, 0.6325 EUR, 0.5120 GBP, 64.20 JPY, 0.8020 CAD.
From NZ today we get the Quarterly Survey of Business Opinion at 10am. From Australia we get NAB Business Confidence data at 1:30pm. Alcoa kicks off Q3 corporate earnings season in the US.
The recovery in the NZD overnight appears to be driven by positioning more than anything else given the risk off tone across most markets overnight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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