By Dan Bell
The NZD/USD opens around 0.83/0.832 this morning following a mixed night for global markets.
Global stocks are trading marginally lower for the day with the S&P 500 currently down 0.06%.
US GDP shrank for the first time in 3 years during the 4th quarter, declining at an annual rate of 0.1% between October and December versus expectations of +1.1%.
For all of 2012 GDP expanded at 2.2%- an improvement compared with 1.8% growth in 2011.
Much of the decline has been blamed on ‘fiscal cliff’ concerns and a decline in federal spending last quarter was the largest drop since 1973.
The EUR continues to push up against most major currencies with the EUR/USD trading over 1.35 and NZD/EUR dropping into the low 0.61’s.
The US Federal Reserve announced monetary policy this morning and made no change to current policy settings - they will continue to print money until the US labour market improves significantly. This was widely expected and maintains a broadly negative tone for the US Dollar.
The NZD opens at 0.7980 AUD, 0.6122 EUR, 0.5257 GBP, 75.78 JPY, 0.8315 CAD.
The RBNZ announces the OCR at 9am this morning with no change expected.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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