The NZDUSD opens lower at 0.8495 this morning.
More questions are being asked on the strength of global growth after a series of disappointing data releases yesterday from China (manufacturing data) and overnight from the US (manufacturing & employment).
This has resulted in a sharp sell off in commodity prices, equity markets, and commodity-based currencies such as the NZD & AUD.
Fonterra’s Global Dairy Trade could not buck the negative trend and fell 7.3% at last nights auction.
UK manufacturing data bucked the trend and came in better than expected, although the sector still contracted slightly, and the GBP strengthened. The NZDGBP has fallen to a 6-week low of 0.5445.
The US Federal Reserve said it will keep buying USD$85 billion in bonds each month to keep interest rates low and spur growth. However, it added that it could increase or taper this pace depending on how the economy responses.
Gold is trading at USD$1456 an ounce (down 1.2%), while Copper & Oil prices have been hit hard (down 2 to 3%).
US equity indices were down 0.9%, Shanghai dropped 0.8%, while the UK FTSE rose 0.3% on the day.
The NZD opens at 0.8495 USD, 0.8265 AUD, 0.6440 EUR, 0.5455 GBP, & 82.70 JPY.
ANZ Commodity Prices hit the tapes at 1:00pm.
European Central Bank has a rate setting meeting tonight – we expected them to cut rates by 0.25% to 0.50%.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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