By Dan Bell
The NZD/USD opens at 0.8455 this morning. The overnight high was 0.8473 – which is near a 14-month high.
The EUR/USD surged to 1.3190 – its highest level since May Friday night after benign USD inflation data released reaffirmed the Fed’ ultra-easy monetary policy.
The US ‘fiscal cliff’ still looms large as talks remain deadlocked. If no agreement is reached by 1 January, then steep tax hikes and spending cuts kick in which could push the US economy back into recession.
China Manufacturing data was positive, reinforcing the view that the Chinese economy is over its slow patch.
Japan’s Liberal Democratic Party won a resounding victory in the weekend’s elections. This win places them in a strong position for further significant monetary easing. NZD/JPY hit a 4-year high of 71.48 this morning.
World equity markets were generally lower. The US indices dropped between 0.3% and 0.7%, and the UK and European indices were little moved either way.
Gold prices finished steady at USD$1695, and Copper prices closed at USD$8,065. Other metals prices were mixed.
The NZD opens at 0.8455 USD, 0.8015 AUD, 0.6420 EUR, 0.5230 GBP, & 71.40 JPY.
Westpac Consumer Sentiment will be released at 10:00am today.
ANZ Business Confidence figures will be released Tuesday, Current Account data Wednesday, and quarterly GDP figures on Thursday, so it is a big week for NZ data as we slide into the Christmas holiday season.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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