By Kymberly Martin
NZ Dollar
The NZD/USD has strengthened overnight to trade at 0.7420 this morning.
There was little to provide the currency with direction during the day yesterday in the absence of local data releases. However overnight, as the USD consolidated last week’s gain, the NZD pushed higher along with its “commodity-linked” peers.
From 0.7340 the NZD/USD has traded up to 0.7420.
Resistance is eyed at this month’s highs around 0.7450. Support will likely be encountered on any dip toward 0.7350.
With a relatively low-key week for NZ data releases, global developments will likely remain the key driver of the NZD this week.
The NZD has also strengthened on the crosses, mostly notably against the GBP. From 0.4820 the NZD/GBP now sits around 0.4880.
The NZD/AUD has also enjoyed some upward momentum overnight.
From 0.9460 the cross now trades at 0.9500. In forecast revisions published yesterday we now see a slightly higher trading range for the NZD/AUD this year.
We now see the cross ending the year around 0.9400. In the near-term we see resistance in the 0.9540-60 window, and support at 0.9400.
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Majors
While the USD consolidated, the “commodity-linked” CAD, AUD and NZD enjoyed a modest rebound overnight.
After Friday night’s payrolls-inspired spurt higher, the USD took the opportunity of a data-light evening to consolidate its gain. The USD index trades at 94.60 this morning.
Following the release of stronger than expected German December trade balance data the EUR enjoyed a short push higher. Stronger than expected exports (3.4%m/m) may have been assisted by the slump in the EUR, but less inspiring was softness in imports (-0.8%), reflecting weaker domestic demand.
Regardless, data was a mere side-show for the region that remains firmly focused on developments in Greece. Tsipras and the country’s official creditors remain in a stand-off. Greece believes its negotiating strength is that the Eurozone is a pack of cards that will collapse if Greece were to exit. The market appears to becoming less convinced of this view. While Greek and some peripheral bonds are showing some signs of stress, overall markets remains fairly orderly. The EUR sits around 1.1330 at present.
Overnight, the oil price extended its recent rebound, as did the broader CRB global commodity index. It is now 7% off its January lows and the WTI oil price is back above US$53/barrel. These moves assisted a rebound in “commodity-linked” currencies overnight. The CAD sits around 0.7% higher relative to the USD, at 1.2450.
The AUD also strengthened overnight. Yesterday, the currency traded a tight path as RBA Governor Stevens failed to make any currency relevant comments at a scheduled speech at the Bank of China RMB clearing bank launch. In addition, the currency seemed little bothered by political wrangling as PM Abbot survived a party leadership vote. However, overnight, the AUD/USD appeared to catch the updraft of improved sentiment toward global commodities. From 0.7760 the AUD/USD now trades around 0.7820. Today, the Jan NAB business confidence survey will be released, along with Q4 AU house prices.
China DPI data will be released this afternoon. Tonight, UK industrial production and US JOLTS job survey are due.
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