Over the past 24-hours the NZD has been the strongest performer whilst the NOK has declined more than 2% against the USD.
Overnight, commodities were on the front foot (the global CRB index has rebounded 0.6%) but equities remained under pressure.
Credit spreads have also pushed wider. Our global risk appetite index (0-100%) remains at a fairly fragile 31%.
However, currencies have not performed in a simple ‘risk-off’ manner overnight. In fact the USD has been broadly softer, and while the ‘safe haven’ CHF and JPY made early morning gains they have subsequently given up most of this move. The USD/JPY trades at 120.00 currently.
The EUR/USD is stronger this morning, but some way off its intra-night highs. Early in the evening, data showed that the German IFO business climate survey had ticked up in Sept, including the expectations component. This points to steady growth.
Having pushed up to intra-night highs above 1.1290, the EUR/USD now sits around 1.1230.
The weakest performing currency overnight, by some margin, was the NOK. It gapped lower after the Norges Bank unexpectedly cut its deposit rate (see Interest Rates). From 8.2500 the USD/NOK now trades at 8.4590, its highest level since mid-2002.
The NZD/USD has been the strongest performer over the past 24-hours, despite the backdrop of muted risk appetite.
Yesterday morning the currency showed limited response to the announcement from dairy cooperative, Fonterra, that it was revising up its guidance for its 2015/16 payout from NZ$3.85 to NZ$4.60 (We see NZ$5 when the milk price is finalised this time next year).
The upward revision builds in the almost 50% bounce in the GDT dairy price since mid-Aug, so was likely somewhat anticipated by the market.
However, overnight, the NZD/USD got the bit between its teeth and pushed up from 0.6270 to 0.6360. Resistance remains at the month-highs of 0.6460. There are no domestic data releases due today.
The NZD also gained on the crosses. The NZD/AUD pushed up firmly from 0.8950 to trade at 0.9050 this morning.
Still, the solid range for the NZD/AUD of the past few months remains intact. The upper-end of this range remains in the vicinity of 0.9150-0.9180.
This morning, attention will fall on a lecture to be delivered by Fed Chair Yellen on inflation and monetary policy, though it is understood she will not take questions.
Get our daily currency email by signing up here:
Daily exchange rates
Select chart tabs
Kymberly Martin is on the BNZ Research team. All its research is available 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.