By Dan Bell
The NZD/USD opens at 0.8210 after volatile Thursday.
The RBNZ held the Official Cash Rate at 2.50%, as was universally expected. The NZD was sold aggressively after the Bank and Governor Wheeler said:
- They don’t expect to raise interest rates this year
- NZ’s economic outlook was “finely balanced”
- The NZD could be overvalued by as much as 15%
- The drought could have a significant impact on the economy
The NZD/USD dropped close to a full cent to a 2013 low of 0.8165 in the immediate post RBNZ aftermath.
The NZD/AUD was also hit hard, falling from 0.8020 to 0.7950 before plunging to a 10-week low of 0.7885 on the release of the stellar Australian employment data – 71,500 jobs were reportedly created in February, compared with the 10,000 expected.
The AUD rocketed higher as the market rapidly backed away from any thoughts of rate cuts by the Reserve Bank of Australia.
The USD fell from 7-month highs against a basket of currencies. The EUR/USD and GBP/USD both made solid gains overnight.
Gold price rose marginally USD$1590 an ounce. Base metal prices were little changed except for Nickel which surged 1.7% higher.
World equity markets rose. The US indices climbed 0.4%, while the UK & EU bourses gained between 0.7& & 1.5%.
The NZD opens at 0.8210 USD, 0.7915 AUD, 0.6310 EUR, 0.5440 GBP, & 78.85 JPY.
NZ Manufacturing Index will be released at 10:30am.
Euro-zone and USD inflation figures hit the tapes tonight, along with US capacity utilisation, industrial production, consumer sentiment, amongst others.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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