The NZDUSD opens higher at 0.7840 this morning.
The RBNZ sparked a further sell-off in the NZD yesterday morning, after the initial damage was done by the US Federal Reserve who gaave a relatively upbeat view of the US economy and said they interest rates may rise sooner than the markets expect if the recovery strengthens.
The NZD dipped further yesterday when the RBNZ commented the currency was at an “unjustified and unsustainable” level at the Official Cash Rate (OCR) announcement. The OCR remains at 3.50%, and is likely to stay at this level for considerable time as the RBNZ stated that it is prudent to undertake a period of assessment and dropped any reference to further rate hikes.
US Q3 GDP figures exceeded expectations (+3.5% versus 3.1% consensus), while the German inflation numbers came in on the weak side.
Global equity markets were higher on the day – Dow +1.3%, Nikkei +0.3%, Shanghai +0.7%, FTSE+0.2%, DAX +0.4%
Gold prices plunged 2.2% to USD$1,198. Oil prices dropped 1.3% on the day.
The current indicative mid-rates are:
NZDUSD 0.7840
NZDEUR 0.6220
NZDGBP 0.4905
NZDJPY 84.45
NZDAUD 0.8880
NZDCAD 0.8780
NZ Building Consents will be released at 10:45am this morning.
---------------------------------------------------------
To subscribe to our free daily Currency Rate Sheet and News email, enter your email address here.
----------------------------------------------------------
Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.