By Dan Bell
The NZD/USD opens higher at 0.8185 this morning, having touched a 0.8200 high overnight, as risk came ‘back on.’
The NZD/USD & EUR/USD both rallied to near 2-week highs, buoyed by optimism that Greece will receive then next tranche of bail-out funds and positive developments towards resolving the threatening US fiscal cliff.
Greece should received the EUR 44 billion of emergency loans, but these funds will only be paid on 5th December if Greece meets all the remaining conditions.
US lawmakers have indicated they should be able to reach a deal to avert the fiscal cliff of tax rises and spending cuts. Failure to agree could push the US economy back into recession.
US Existing Home Sales showed improvement, indicating the US economy is picking up.
World equity markets surged higher on the day. The US indices leaped between 1.3% to 1.8%, while UK/European markets soared an impressive 2.3% to 2.8%.
Gold prices rose 1.0% to USD$1733, while Copper jumped 2.5% higher to around USD$7788. Other metals prices were also significantly higher, with Nickel being the stand out gaining 3%.
The NZD opens at 0.8185 USD, 0.7865 AUD, 0.6390 EUR, 0.5145 GBP, & 66.45 JPY.
The NZD/JPY is approaching 7-month highs.
There no domestic data releases scheduled today.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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