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The Opening Bell: Where currencies start for Monday, March 3, 2014

Currencies
The Opening Bell: Where currencies start for Monday, March 3, 2014

By Dan Bell

The NZDUSD opens lower at 0.8350/65 on the wide this morning.

The NZDUSD touched a 6-week high above 0.8400 Friday night, before slipping lower.

Tensions rose in Ukraine over the weekend as Russian troops seized two airports in the country's Crimea region, and surrounded several small Ukrainian military outposts.

Ukraine has now upped the ante and mobilised for war on Sunday, and the US has threatened to economically isolate Russia. Russian President Putin has defended his right to protect Russia's citizens and interests by invading Ukraine.

Global risk aversion spiked higher on fears of contagion from the Ukrainian situation - the NZDUSD has opened lower this morning as risk assets get hit.

In other news, US GDP and Pending Homes Sales numbers both missed expectations, while Chicago PMI and US Consumer Sentiment figures exceeded forecasts. Chinese (official) Manufacturing PMI feel to an 8-month low (although growth positive).

Friday's NZ Business Confidence release was very strong, which reinforced expectations for the RBNZ to raise the Cash Rate by 0.25% to 2.75% on 13th March.

Global equity markets were mixed on the day - Dow +0.3%, Nikkei -0.6%, Shanghai +1.2%, FTSE -0.0%, DAX +1.1%

Gold prices are lower at USD$1327. Oil prices rose 0.1%.

The NZD opens at 0.8355 USD, 0.9400 AUD, 0.9260 CAD, 0.6070 EUR, 0.4995 GBP, & 84.75 JPY.

NZ quarterly Overseas Trade Index numbers will be released at 10:45am.

Chinese Manufacturing data (HSBC Final Manufacturing PMI) hit the tapes at 2:45pm. ECB President speaks tonight, followed by US Manufacturing data (ISM Manufacturing PMI).

The Reserve Bank of Australia has an interest rate decision tomorrow - rates expected to remain at 2.50%.

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

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