The NZDUSD opens higher at 0.8325 this morning.
The NZDUSD traded to a 3-week high of 0.8340 overnight, as the USD weakened leading into, and post, US Federal Reserve Chairman Yellen's Washington testimony.
Chairman Yellen reiterated the Fed's commitment to a measured tapering of its massive bond purchase program, and commented the US labour market recovery was "far from complete." Yellen also mentioned they were watching closely the recent volatility in global (emerging) markets.
There had been some speculation that recent disappointing US data, job creation data in particular, might spur the Fed to hold off signaling further bond-purchase tapering. This was not the case, and Yellen is continuing the policies of her predecessor Ben Bernanke.
'Risk assets' were bought across the board. Global equities, gold prices, and commodity currencies, such as the NZD & AUD, all rallied strongly.
Global equity markets were markedly higher on the day - Dow +1.2%, Nikkei +1.8%, Shanghai +0.8%, FTSE +1.2%, DAX +2.0%
The Gold Price jumped 1.2% to USD$1289 an ounce. Oil prices rose 0.2%.
The NZD opens at 0.8325 USD, 0.9215 AUD, 0.9180 CAD, 0.6105 EUR, 0.5060 GBP, & 85.45 JPY.
There is no data scheduled on the domestic calendar today.
Australian Consumer Sentiment figures, and Chinese Trade Balance released this 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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