The NZDUSD opens higher at 0.8095 this morning.
The NZDUSD was under pressure yesterday to hit a 0.8048 low - it was dragged down by the plunging AUDUSD, which hit an 18-month low.
Overnight the NZDUSD managed a strong rally to a high of 0.8160 as the USD and equity markets weakened across the board.
However, the rally soon reversed this morning after comments from the RBNZ Governor who said, amongst other things that:
- NZD is significantly overvalued despite recent fall
- Has coped with high NZD through low rates and some intervention
- Has intervened to dampen NZD spikes
- Is prepared to scale up intervention if looks like it will work
- Concerned about the housing market, but higher interest rates might boost the NZD
- If house price pressures ease, & NZD stays high, interest rates could be cut.
Here is the link to the full speech: http://www.rbnz.govt.nz/speeches/5298709.html
The NZDAUD traded to 0.8455 overnight, a level last seen in January 2009, before dropping back.
Global equity markets fell across the board. The US Dow Jones is 0.7% lower, while the European & UK markets dropped between 1.7% to 2.0%.
Gold prices rose 0.9% to USD$1393 an ounce overnight. Oil prices plunged almost 2%.
The NZD opens at 0.8095 USD, 0.8400 AUD, 0.6255 EUR, 0.5345GBP, & 81.80 JPY.
NZ building Consents will be released at 10:45am.
Australian building approvals and private capital expenditure hit the tapes at 1:30pm. US GDP, weekly unemployment claims, and pending home sales are the most influential data to be released tonight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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