The NZDUSD opens higher at 0.8305 this morning.
Some interesting comments from RBNZ officials the past 24 hours:
Assistant Governor John McDermott said in a speech yesterday that NZ households and businesses can look forward to lower interest rates over the longer haul than in previous economic cycles as the “neutral” rate of interest appears to have fallen.
Governor Wheeler said in a opinion piece published in the NZ Herald this morning that the RBNZ would raise rates more aggressively than currently forecast if the new mortgage lending limits fail to slow house price inflation.
Having dipped down towards 0.8200 yesterday afternoon, the NZDUSD has now pushed back above 0.8300 – partially thanks to Governor Wheeler and partially due to a weaker USD, which fell to 7-month lows against a basket of currencies.
The European Central Bank left interest rates unchanged overnight, but is still prepared to do more should further action be warranted.
The financial markets remain jittery because of the US government shut down. Even if the current federal budget impasse is resolved soon, the US debt ceiling is looming large and risks a possible US government debt default – this could further roil global markets.
Global equity markets were mostly lower on the day – Dow -0.6%, Nikkei -0.3%, Shanghai +0.6%, FTSE -0.4%, DAX -0.7%
The Gold Price rose 2% to USD$1316 an ounce. Oil jumped 1.1% and base metal prices all increased on the day.
The NZD opens at 0.8305 USD, 0.8855 AUD, 0.8585 CAD, 0.6115 EUR, 0.5115 GBP, & 80.90 JPY.
There is no data on the domestic calendar today.
Chinese non-manufacturing (services) PMI will be released at 2:00pm, followed by US weekly unemployment claims & their non-manufacturing PMI figures.
It appears Friday evening’s scheduled US non-farm payroll employment figures have become a victim of the US government shutdown – this very important release is likely to be delayed.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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