The NZDUSD opens markedly lower at 0.8075, after some US Federal Reserve related volatility.
The NZDUSD drifted lower through out the course of yesterday.
It hit a lower of 0.8118 late last night before it shot straight to 0.8200 after Fed Chairman Bernanke stated in his prepared speech to the US Congress that it was too early to remove existing stimulus measures and bond-buying program.
However, the NZDUSD was soon slammed into reverse when Bernanke, in the question & answer period after his prepared remarks, stated that if the economy continued to improve, then the Fed could “in the next few meetings take a step down” in its bond purchases and highlighted the risks of keeping interest rates too low for too long.
The NZDUSD subsequently fell to 0.8058 – a fresh 6-month low.
The net affect of all this is IF the US economic data, and labour market in particular, continues to improve, stimulus will be gradually withdrawn, USD will strengthen, and NZDUSD will fall further.
However, if the data disappoints then the opposite is likely to occur.
In other news, the Swiss central bank are reportedly considering offering negative interest rates, and UK retail sales for April were horrible.
Global equity markets closed mixed. USD equity indices fell between 0.5% to 1.1%, while the Asian and European markets were higher.
Gold prices were rather whippy, but eventually fell 0.6% to USD$1367 an ounce overnight. Oil prices dropped over 1%.
The NZD opens at 0.8075 USD, 0.8325 AUD, 0.6280 EUR, 0.5365 GBP, & 83.25 JPY.
There is no data scheduled on the domestic calendar today.
Australian inflation expectations and Chinese manufacturing data hit the tapes this afternoon.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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1 Comments
The net affect of all this is IF the US economic data, and labour market in particular, continues to improve, stimulus will be gradually withdrawn, USD will strengthen, and NZDUSD will fall further.
However, if the data disappoints then the opposite is likely to occur.
Got it. When wasn't it ever thus? - a bet each way then, or not at all.?
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