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The Opening Bell: Where currencies start for Tuesday, August 6, 2013

Currencies
The Opening Bell: Where currencies start for Tuesday, August 6, 2013

By Dan Bell

The NZDUSD opens higher at 0.7815 this morning.

While the ramifications and damage from the Fonterra contamination scare continue, the NZDUSD has largely recovered from yesterday’s sharp sell off.

The NZDUSD traded as high as 0.7815 and the other NZD crosses also gained ground.

The next Fonterra Global Dairy auction takes place overnight. This will be watched closely for any indication of damage to their markets, brand and reputation.

The US services sector grew at a faster pace than expected, according to data released overnight. This adds to the view that US economic growth will continue to pick up in the 2nd half of 2013.

The Reserve Bank of Australia is widely expected to lower their Cash Rate by 0.25% to 2.50% at today’s meeting. If done, this which would match the RBNZ’s official cash rate.

Global equity markets were generally a slightly lower, although the Shanghai Index bucked the trend to gain 1.4% on the day.

The Gold Price fell 0.8% to USD$1301 an ounce. Oil dropped 0.25% while base metals prices were marginally weaker.

The NZD opens at 0.7815 USD, 0.8755 AUD, 0.5895 EUR, 0.5090GBP, & 76.85 JPY.

There is nothing on the domestic data calendar today.

Australian Trade Balance, ANZ Job Ad, & Home Price data hit the tapes at 1:30pm, followed by the RBA Cash Rate decision at 4:30pm.

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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »

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