The NZDUSD opens lower at 0.7860 this morning.
The NZD drifted to a low of 0.7840 overnight before jumping after the release of the minutes from the last US Fed interest rate meeting.
The key points from the Fed minutes were:
- Discussed the ‘somewhat weaker’ outlook in Europe, China, Japan, and the stronger USD.
- Some concern inflation could be below trade for ‘quite some time’.
- Decided to keep the ‘considerable time’ phrase in reference to how long interest rates will remain at low levels.
- Discussed drop in market-based inflation expectations. The Fed alert to possible downward shift in long term inflation expectations.
The NZDUSD jumped 30 points on the above in volatile trading.
Iron Ore prices have fallen to a 5 year low which is adding to pressure on the AUD, while the weak dairy prices are weighing upon the NZD.
Global equity markets were mixed on the day – Dow +0.1%, Nikkei -0.3%, Shanghai -0.2%, FTSE-0.2%, DAX +0.2%.
Gold prices dipped 0.3% to USD$1,194. Oil prices gained 0.5% on the day.
The current indicative mid-rates are:
NZDUSD 0.7860
NZDEUR 0.6260
NZDGBP 0.5010
NZDJPY 92.60
NZDAUD 0.9125
NZDCAD 0.8915
NZ Producer Price Index will be released at 10:45am this morning.
The Chinese Manufacturing data will hit the tapes at 2:45pm.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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