By Dan Bell
The NZD/USD opens around 0.8170 after trading to an interbank high of 0.8237 overnight.
Risk aversion has hit global markets overnight with global equity markets down across the board. The S&P 500 is currently down 0.7%.
Oil prices rose to 3 week highs on Tuesday after threats of Syrian-Turkish violence raised supply concerns and increasing political tensions in the Middle East.
Concerns about Greece and Spain were also doing the rounds last night which also weighed on sentiment and has put the EUR under pressure against most major currencies.
The US Dollar and Japanese Yen are stronger against most currencies as investors bail out of ‘risk’ and into safe haven currencies.
In the United States, a measure of economic optimism rose to its highest level since 2006. The IBD/TIPP Economic Optimism Index improved by 2.2 points, or 4.2%, in October posting 54 vs. 51.8 in September.
The International Monetary Fund (IMF) downgraded its outlook for the global economy and said "Risks for a serious global slowdown are alarmingly high." It was its bleakest assessment of global growth prospects since the 2009 recession. The fund expects the world economy to expand just 3.3% this year and 3.6% in 2013.
The NZD opens at current indicative mid rates: 0.80 AUD, 0.6345 EUR, 0.5110 GBP, 63.90 JPY, and 0.7990 CAD.
Not much to report from New Zealand today. From Australia we get Consumer Sentiment at 12:30pm. Later this morning the first of the bellwether stocks in the US, Alcoa, reports Q3 earnings.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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