The NZDUSD opens lower at 0.8665 this morning.
The USD rose to a 6-week high against a basket of currencies after data showed the US inflation rate is continuing to trend gradually higher, although the actual inflation level remains relatively low. The markets still expect the US central bank will continue to reduce its bond purchase program and will raise interest rates in the latter half of 2015.
The EURUSD fell to an 8-month low on expectations the European Central Bank will need to provide more stimulus to assist the struggling euro-zone economy.
The GBP was firm overnight as June's inflation data came in on the high side, bolstering expectations that the Bank of England will raise interest rates in the coming months.
The NZDUSD traded in a circa 40 point range overnight, but still remains within recent levels.
Domestically, the market is awaiting Thursday's expected RBNZ interest rate hike and accompanying statement for any indication on whether there will be a pause future rate hikes.
Global equity markets were up on the day - Dow +0.4%, Nikkei +0.8%, Shanghai +1.2%, FTSE+1.0%, DAX +1.3%
Gold prices fell 0.5% to USD$1307. Oil prices dipped 0.3%.
The current indicative mid-rates are:
NZDUSD 0.8665
NZDEUR 0.6435
NZDGBP 0.5080
NZDJPY 87.95
NZDAUD 0.9225
NZDCAD 0.9305
There is no data scheduled on the domestic data calendar today.
Australian quarterly CPI figures hit the tapes at 1:30pm.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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