By Dan Bell
The NZD/USD opens this morning around 0.8370, down almost a cent from Friday’s highs over 0.8450.
China’s CPI increased more than expected to a 7 month high of 2.5% in December which suggests we may not see further stimulus measures from China’s Central Bank as they attempt to curb inflationary pressures.
The EUR has been one of the strongest currencies over the weekend and extended its recent gains against most major currencies. The EUR/USD opens at 1.3340, while NZD/EUR is down almost 200 points from last week’s highs.
The BOJ will likely adopt a 2% inflation target later this month, double its current goal, and consider easing monetary policy again, most likely by increasing government debt and asset purchases which is expected to weaken the Yen further.
The biggest weekly inflow into U.S. based managed funds in more than 11 years could be a sign that stocks are coming back into favour some top money managers said.
The inflow into U.S. stock mutual funds was the biggest since May 2001, and the $18.32 billion aggregate injection of money into equities funds was the biggest since mid-2008.
The NZD is weaker against the major cross rates and opens at 0.7955 AUD, 0.6273 EUR, 0.5190 GBP, 74.75 JPY, 0.8237 CAD.
Today we get NZ Credit Card spending data and REINZ housing numbers. Tomorrow we get NZ Quarterly Survey of Business Opinion and CPI on Friday.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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