The NZDUSD opens at 0.6758 (mid-rate) this morning.
Yesterday saw the NZDUSD break up through 0.6800, levels last seen back in October, before broad USD strength and the latest GDT auction put the NZD on the back foot.
The latest GDT auction fell short of economists’ expectations of a 5%-10% gain, increasing by just 1.9% from previous auction. The current Fonterra forecast payout of $4.60 per kg requires whole milk powder prices to achieve US 3,000 per tonne and with last night’s auction topping out at US 2,304 a tonne there will be further pressure on Fonterra to lower their forecast.
Elsewhere German economic confidence improved on the back of the ECB’s latest asset purchase programme, rising to a five-month high in December of 16.1 (+5.7 points).
Again we are light on the data front today, ahead of tomorrow’s much anticipated FOMC policy statement. The market has all but priced in a 25 basis point rise followed by a dovish statement.
European and U.S. equity markets are broadly higher - Dow +1.31%, S&P 500 +1.42%, FTSE +2.45%, DAX +3.07%, CAC +3.16%, Nikkei -1.68%, Shanghai -0.29%.
Gold prices are holding steady at $1063 an ounce, WTI Crude Oil is currently up 3.5% trading at $37.60 a barrel
Current indicative rates:
NZDUSD 0.6758 -0.2%
NZDEUR 0.6185 0.5%
NZDGBP 0.4490 0.3%
NZDJPY 82.25 0.5%
NZDAUD 0.9399 0.6%
NZDCAD 0.9285 -0.3%
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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