By Dan Bell
The NZD/USD opens at 0.8360 this morning.
Friday’s negative Q4 CPI reading (-0.2% versus +0.1% expected) sparked an immediate 50 point sell off in the NZD/USD. This sell down continued Friday night to a low of 0.8335 after the release of worse than anticipated US consumer sentiment data.
The JPY dropped to a 31-month low against the USD on expectations of aggressive monetary policy action from the Bank of Japan. The NZD/JPY stayed just below 4 ½ year highs.
World equity markets were little changed. The US Dow Jones index managed to close at a 5-year high, while Japanese Nikkei and Chinese Shanghai indices surged 2.8% and 1.7% higher respectively.
Gold prices dropped slightly to USD$1684. Copper and other base metals prices rose.
The NZD opens at 0.8360 USD, 0.7955 AUD, 0.6280 EUR, 0.5275 GBP, & 75.30 JPY.
It is Wellington Anniversary and US Martin Luther King Day so we expect a quiet day domestically.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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