By Dan Bell
The NZD/USD opens lower at 0.8140 this morning as the USD gained on safe haven buying.
The USD strengthened, pulling both EURUSD and Copper prices to 2-month lows, as the looming US fiscal cliff, and renewed euro-zone concerns weighed on risk appetite. These factors also pulled the NZD/USD to a low of 0.8125.
Germany, Europe’s largest economy, is predicted to slow in Q4 2012 & Q1 2013, while the French Central Bank said it expected France to slip into recession.
Core Europe is being increasing affected by the on-going EU debt-crisis to which there is no end in sight, as Greece and Spain’s issues continue to loom large.
The markets are very concerned the US will struggle to find a compromise before hitting the fiscal cliff on 1st January 2013.
On the plus side, China data was positive - industrial output & retail sales for October both beat expectations, while inflation eased.
Global equity markets were little changed Friday.Gold prices held steady at USD$1730, while Copper fell to USD$7560 a tonne. Other metals prices were weaker across the board.
The NZD opens at 0.8140 USD, 0.7835 AUD, 0.6405 EUR, 0.5115 GBP, & 64.65 JPY.
There is nothing on the domestic calendar today which is a US Veterans Day holiday. NZ Retail Sales, to released Wednesday, is the most significant piece of local data this week.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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