The NZDUSD opens higher at 0.8595 this morning.
The NZDUSD traded to a 1-week high of 0.8615 overnight, the NZDAUD fell to 0.9310 - a level last seen on 7th March, while the NZDJPY hit a 6-year high of 88.30. The NZD TWI (trade-weighted index) is only a touch below the post-floating NZD high established several days earlier.
The AUD performed particularly well overnight. The AUDUSD hit a 4-month high after Reserve Bank of Australia Governor Glenn Stevens said there are early signs Australia is in transition from mining-led demand growth to domestic consumption and the economy may expand later this year. Stevens failed to comment that the AUD is too high, as he has done on prior occasions, which is causing some to reassess just how unhappy the RBA would be if the AUD strengthened further. The NZD traded higher on the AUD's coat-tails.
US data, released overnight, was generally on the strong side. There is a growing conviction the US economy will continue to improve and the US Fed will keep cutting back its stimulus measures.
NZ Trade Balance will be released at 10:45am.
Global equity markets were mixed on the day - Dow -0.2%, Nikkei +0.4%, Shanghai -0.2%, FTSE +0.0%, DAX +1.2%
Gold prices fell to a 6-week low of USD$1300.70 and currently trades at USD$1303. Oil prices dropped 0.1%.
The current indicative mid-rates are:
NZDUSD 0.8595
NZDEUR 0.6230
NZDGBP 0.5185
NZDJPY 87.70
NZDAUD 0.9325
NZDCAD 0.9555
US Weekly Unemployment Claims and Pending Home Sales 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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