The NZDUSD opens lower at 0.8670 this morning.
The RBNZ's Governor Wheeler triggered a near 1% fall in the NZD yesterday morning after he warned the central bank could intervene to push the NZD lower and that it was unsustainably high. He also suggested interest rate increases could be slowed if the NZD remained at elevated levels. The NZDUSD fell from 0.8745 to 0.8700 in initial reaction, and fell further overnight to hit a 0.8660 low.
US Fed Chair Janet Yellen maintained her accommodative outlook on monetary policy, which she justified given "considerable" slack in the US labour market and low inflation. The USD strengthened a little despite these comments.
Geopolitical tensions eased after Russian President Vladimir Putin urged Ukrainian separatists to postpone a referendum and said he is pulling his troops back from their border.
Global equity markets were mixed on the day - Dow +0.6%, Nikkei -2.9%, Shanghai -0.9%, FTSE -0.0%, DAX +0.6%
Gold prices fell by 1.2% to USD$1289. Oil prices gained 1.1%.
The current indicative mid-rates are:
NZDUSD 0.8670
NZDEUR 0.6230
NZDGBP 0.5115
NZDJPY 88.35
NZDAUD 0.9290
NZDCAD 0.9445
There is no data on the domestic calendar today.
Australian Employment figures will be released at 1:30pm, followed by Chinese Trade Balance later this afternoon.
US Fed Chairperson Janet Yellen continues her testimony before the Joint Economic Committee overnight.
The Bank of England & European Central Bank both have interest rate setting meetings tonight. Their rates are widely expected to remain at 0.5% & 0.25% respectively.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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