By Dan Bell
The NZD/USD opens higher at 0.8220 this morning, having peaked at 0.8241 overnight.
The RBNZ kept the official cash rate (OCR) at 2.50% yesterday, and the accompanying statement was slightly more hawkish, that is concerned about inflation, than previously. This caused the NZD/USD to rally sharply from 0.8140 immediate before the RBNZ release.
US economic reports were mixed overnight. New jobless claim were better, durable goods orders were unchanged (excluding defense and aircraft), while contracts to buy previously owned houses disappointed.
US treasury yields have risen and touched a 5-week high, despite the Fed’s commitment to keeping rates low, which has made the USD more attractive at the margins.
Comments from a Chinese ministry that the country’s factory output should pick up toward the end of 2012 and s survey showing Chinese orders at their highest levels in months underpinned investor sentiment.
UK Q3 GDP showed the economy was now out of recession, although one-off factors related to the London Olympics maybe be masking the true underlying situation.
Global equity markets were little changed, although the Shanghai Composite Index (SSEC) dipped 0.7%.
Gold prices reversed its recent trend to gain 0.6% to USD$1712 an ounce, Oil prices gained 0.7% while Copper prices steadied following recent prices falls.. Other commodities prices were marginally higher with the exception of Nickel which fell 1.2% to USD$16,193 per tonne.
The NZD opens at 0.8160 USD, 0.7895 AUD, 0.6290 EUR, 0.5090 GBP, & 65.05 JPY.
The NZ Trade Balance hit the tapes at 10:45am today – not expected to be a market mover. However, Spanish unemployment (25% at rising) and USD GDP figures, released tonight, may have more impact.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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