The NZD/USD opens at 0.8240 this morning after the Cypriot parliament rejected the proposed tax on bank deposits.
Amidst wide spread protests, and pressure from Russia who have a large deposit base there, Cyprus’s parliament gave in and rejected the tax proposal. However, in doing so they have brought the nation to the brink of financial meltdown.
EU countries have stated they would withhold EUR 10 billion in bailout loans, and the ECB could end emergency lending to the Cypriot banks, if Cyprus’s depositors don’t share the pain of the rescue.
All could get rather nasty – the EURUSD, NZDUSD, and equity markets have all fallen in response.
Gold price rose to USD$1612 on flight-to-safety. Most other commodities fell in price.
World equity markets are generally down across the board.
The NZD opens at 0.8240 USD, 0.7945 AUD, 0.6390 EUR, 0.5460 GBP, & 78.30 JPY.
NZ Current Account will be released today at 10:45am.
The machinations concerning Cyprus are likely to continue to dominate headlines.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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