The NZDUSD opens higher at 0.7900 this morning.
Prices dipped 2.3% at Fonterra’s Global Dairy Trade auction held overnight. This is a relative minor correction given the significant run up in prices at recent auctions – the market has shrugged off the contamination scare for the most part.
The Reserve Bank of Australia cut their cash rate by 0.25% to 2.50% yesterday. This was almost universally expected and priced in before the announcement – the AUDUSD rallied strongly in a ‘short squeeze,’ with the NZD following suit. The RBA & RBNZ now have identical cash rates.
The US Trade Deficit was better than forecast, and the USD fell on the back of lower expectations that the US Federal Reserve would start tapering its bonds purchases in the near term. The NZDUSD rose to a 0.7915 high in response.
NZ quarterly Employment data hit the tapes at 10:45am. Current expectations are for job growth of +0.4%, and an unemployment rate of 6.3%.
Global equity markets were generally lower on the day – US indices lost circa 0.6%.
The Gold Price plunged 1.4% to USD$1283 an ounce. Oil dropped 0.6% while base metals prices were generally a little weaker.
The NZD opens at 0.7900 USD, 0.8790 AUD, 0.5935 EUR, 0.5145GBP, & 77.20 JPY.
Reserve Bank of Australia Assistant Governor gives a speech at 1:30pm today.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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