The NZDUSD is a higher at 0.8230 this morning ahead of the NZ budget.
The budget will be announced at 2.30pm. Expectations are the Government will confirm it is on target to achieve a budget surplus by 2014/2015.
If there are no surprises, then its impact on the NZD should be minimal.
The EURUSD fell to 6-week lows after disappointing euro-zone GDP data which showed an unexpectedly large contraction.
US data released overnight disappointed – US producer prices dropped by the largest margin in 3 years, indicating benign inflation and giving scope to the US Federal Reserve to keep monetary policy very accommodative.
However, the USD still strengthened and US equity markets rallied to new highs.
Global equity markets are higher.
Gold prices fell over 2% overnight and trades at USD$1393 an ounce. Increasing economic optimism and very strong equity markets are undermining gold’s safe-haven appeal.
The NZD opens at 0.8230 USD, 0.8325 AUD, 0.6390 EUR, 0.5405 GBP, & 84.20 JPY.
The ‘Business NZ’ Manufacturing Index hits the tapes are 10:45am, followed by The Budget at 2:00pm.
US & euro-zone inflation figures will be released tonight, along with US employment claims, Philly Feb index, 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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