The NZDUSD opens higher at 0.7850 this morning.
The NZDUSD traded to a 3-week peak of 0.7883 overnight as speculative short positions were unwound - as they also were for the AUDUSD.
The NZD strengthened in the face of broad based USD strength, slightly elevated Chinese inflation data, and a disappointing Australian business condition & confidence survey. Although yesterday’s NZ business confidence figures showed marked improvement.
The USD climbed versus the EUR, JPY, and GBP, and the NZDEUR, NZDJPY, and NZDGBP surged to levels last seen over 5-weeks ago.
Easy monetary conditions are expected to continue for many months to come in the UK and Euro-zone, which contrasts with expectations the US Federal Reserve will begin to remove policy accommodation, possibly as soon as September.
Global equity markets marched higher across the board. US equity markets gained 0.6%, UK & European bourses climbed between 0.5% to 1.1%. Japan’s Nikkei index was the stand out in rising 2.6% on the day.
The Gold Price improved to USD$1248 an ounce. Oil rose USD$0.80 per barrel while base metals prices were pushed lower by the stronger USD.
The NZD opens at 0.7850 USD, 0.8550 AUD, 0.6140 EUR, 0.5280GBP, & 79.35 JPY.
There is no domestic data due today.
Australian Westpac Consumer Sentiment will be released at 12:30pm, followed by Chinese Trade Balance in the early 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 Gold Price improved to USD$1248 an ounce.
And backwardation extended out to a year. Who demands gold that cannot be delivered? Read more.
It's certainly a case of more printed USD liquidity chasing to few quality assets. Read more
Even our own RBNZ has nearly half of it's NZ government securities holdings transferred out to counterparty institutions via repo transactions. Are they (banks) short of pledged securities or just wish to short otherwise unavailable securities?
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