The NZDUSD opens higher at 0.8615 this morning.
US Q1 GDP figures, released overnight, came in very disappointing at +0.1% versus 1.2% expected, coupled with the US employment cost index also printing lower than forecast levels. The USD weakened across the board in response, driving the NZDUSD back to 0.8600.
The US Federal Reserve Bank Open Market Committee (FOMC) interest rate decision hit the tapes at 6:00am this morning. The Fed announced a further USD$10 billion cut to its bond-buying program, but reiterated interest rates will not be raised for a considerable period after the bond-buying program has been completely withdrawn.
The Fed also mentioned economic growth has picked up recently after the severe winter weather played a role in slowing it down.
The NZDUSD rallied to a high of 0.8630, as the USD weakened further post the FOMC.
The NZDAUD rose to a 1-week high of 0.9280.
Euro-zone inflation numbers undershot by less than expected; however they are not seen as low enough to force the European Central Bank to provide further economic stimulus to the region.
Global equity markets were mostly higher on the day - Dow +0.3%, Nikkei +0.1%, Shanghai +0.0%, FTSE +0.2%, DAX +0.2%
Gold prices are lower at USD$1291. Oil prices fell by 0.7%.
The current indicative mid-rates are:
NZDUSD 0.8615
NZDEUR 0.6210
NZDGBP 0.5105
NZDJPY 88.05
NZDAUD 0.9275
NZDCAD 0.9450
There is no data on the domestic calendar today.
Chinese Manufacturing data will be released this afternoon, followed by US Manufacturing Data and some US-Fed speaks 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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