The NZDUSD opens sharply higher at 0.7380 this morning.
Having nudged down to 0.7200 Thursday morning, the NZD leaped after the RBNZ did not indicate any prospect of a near term rate.
The central bank is firmly ‘on hold’ for 2015 and stated falling inflation expectations and deteriorating economic data were the necessary conditions before they would consider cutting interest rates.
The NZDUSD rallied strongly throughout the night to hit a high of 0.7440, while the NZDAUD jumped to 0.9645 before retreating.
The USD weakened overnight after the release of disappointing US retail sales figures and some ‘strong USD’ fatigue set in.
The GBP weakened after Bank of England Governor said he was in no hurry to raise interest rates and the impact of low global inflation would last for some time. He expects to make limited and gradual rate increases over the next 3 years as inflation returns to their target band.
Global equity markets were mostly higher on the day – Dow +1.4%, Nikkei +1.4%, Shanghai +1.9%, FTSE +0.6%, DAX -0.1%
Gold prices steadied at USD$1,153. Oil prices (Brent crude) dipped to USD$57.12 per barrel.
The current indicative mid-rates are:
NZDUSD 0.7380
NZDEUR 0.6955
NZDGBP 0.4960
NZDJPY 89.60
NZDAUD 0.9590
NZDCAD 0.9375
NZ Business Manufacturing Index will be released at 10:30am today – not expected to be much of a market mover.
Tonight brings US Producer Price Index, Consumer Sentiment & Inflation Expectations.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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