The NZDUSD opens lower at 0.8430 this morning.
Global dairy prices fell 4.2% at the latest Fonterra auction, while volume increased almost 10% from the previous one. The NZD fell to a near 3-month low of 0.8420 in response.
Yesterday, the Reserve Bank of Australia held rates at a record low of 2.50%, as widely expected, and mentioned the AUD was historically high. It reiterated its outlook was for a period of steady policy. The AUD strengthened nevertheless which dragged the NZD to a 0.8473 overnight high, before it retreated.
Euro-zone annual consumer inflation fell to 0.5%. This is reinforcing the view the ECB will announce further monetary easing at its Thursday night's meeting (NZ time).
US factory orders, released overnight, were stronger than expected - this is the 3rd straight month of gains and is supportive of the view the US economy is continuing to improve.
Global equity markets were mostly lower on the day - Dow -0.1%, Nikkei +0.7%, Shanghai -0.3%, FTSE -0.4%, DAX -0.3%
Gold prices gained 0.2% to USD$1246 overnight. Oil prices were essentially flat.
The current indicative mid-rates are:
NZDUSD 0.8430
NZDEUR 0.6185
NZDGBP 0.5035
NZDJPY 86.35
NZDAUD 0.9105
NZDCAD 0.9205
A Commodity Price Index will be released at 1.00pm today.
Australian GDP figures hit the tapes at 1:30pm.
US ADP non-farm employment numbers (a precursor Friday's influential non-farm payroll figures), US Trade Balance and Manufacturing data will be released 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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