The NZDUSD opens higher at 0.7965 this morning.
The USD dropped across the board overnight on concerns about when the US Federal Reserve will begin to taper its ultra-loose monetary policy.
The USD-index fell to 4-month lows, and the NZDUSD spiked as high as 0.8019 before retreating.
The NZDUSD hit a 1-year low of 0.7761 the previous night, and then rallied over 250 points within 24 hours!
The high level of volatility is likely to continue as uncertainty surrounding the US Fed action as well as market positioning impacts the currency markets.
The Reserve Bank of New Zealand Cash Rate and related statement will be released at 9am today. Rates remain at 2.50%, and the RBNZ is likely to mention the housing market is still a concern, and the NZD is remains too high, but we do not expect them to bring their tightening cycle forward.
Global equity markets fell again overnight, with US Dow Jones index positing its first 3-day drop this year.
Gold prices rose USD$10 to USD$1387 an ounce overnight. Oil and commodity prices were higher on the day.
The NZD opens at 0.7965 USD, 0.8410 AUD, 0.5970 EUR, 0.5080GBP, & 76.50 JPY.
RBNZ cash rate announcement at 9am, followed by RBNZ Governor’s speech at 1:10pm.
Australian labour force figures will hit the tapes 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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