The NZDUSD opens lower at 0.8010 this morning.
Having traded above 0.8100 early yesterday, the NZDUSD was steadily sold lower to break beneath the 0.8000 barrier overnight - it hit a low of 0.7970.
The primary driver behind the NZD volatility is the USD, which surged back strongly having weakened sharply the previous day after data showed their manufacturing sector contracted in May.
Prices fell 5.3% at Fonterra’s dairy auction overnight, which follows a 2.1% drop the previous sale. However, volume sold jumped 38% on the previous auction.
US Trade Deficit was slightly larger than expected.
Two US Fed members gave speeches – one stated the US needs a lot more progress on jobs, while the other said that slowing bond-buying (from USD$85 billion per month) does not mean tightening policy.
Global equity markets were mixed. European & Asian indices rose (Nikkei jumped 2.1% yesterday), while the US markets fell circa 0.5%.
Gold prices fell 0.9% to USD$1398 an ounce overnight. Oil prices dropped around 1.0%.
The NZD opens at 0.8010 USD, 0.8305 AUD, 0.6125 EUR, 0.5230GBP, & 80.15 JPY.
ANZ Commodity Price Index will be released at 1:00pm today – this is the only domestic data release this week.
Australian quarterly GDP figures will be released at 1:30pm.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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