The NZDUSD opens sharply higher at 0.7890 this morning.
The EUR fell, and USD rose, after the European Central Bank pledged to keep interest rates low for an extended period of time.
Positive US data further boosted the USD . The ADP employment figures, a precursor to tonight’s all-important US non-farm payroll numbers, were solid and the weekly new jobless claims fell near a 5 year low last week. In addition, data showed the US service sector grew at its fastest pace in nearly 8 years in August.
The data indicates the US labour market, a key for Fed decisions, is staging a slow and steady recovery. This may persuade the US Fed to begin to taper its US$85 billion per month in buying of US Treasury and mortgage-backed securities.
The NZDUSD fell to 0.7860, then to rallied above 0.7900, before slipping back. The NZDEUR climbed over 0.6000, and NZDJPY rose above 79.00 – levels last seen 2 ½ weeks ago.
Attention will now focus on tonight’s key US non-farm payroll employment figures.
Global equity markets were generally higher on the day – Dow +0.1%, Nikkei +0.1%, Shanghai -0.4%, FTSE +0.9%, DAX +0.5%
The Gold Price was dropped 1.7% to USD$1369 an ounce. Oil prices rose 0.3% and base metal prices were mixed.
The NZD opens at 0.7890 USD, 0.8640 AUD, 0.6015 EUR, 0.5060 GBP, & 79.00 JPY.
There is no data scheduled on the domestic calendar today.
Australian AIG Construction Index will be released at 11:30am. G20 meeting continue, and the all-important US non-farm payroll employment figures will hit the tapes tonight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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