By Kymberly Martin
The USD pushed a little higher overnight. The GBP has been the worst performer over the past 24-hours while the NOK outperformed. The NZD has slipped to 0.6530.
Equities provided positive returns in Europe and the US after modest (assisted?) gains in key China equity indices.
Yesterday afternoon, the PBoC set the USD/CNY reference rate at 6.5628, little changed from Monday’s fix. The maintenance of a significant gap with the previous day's close, suggests that authorities currently prioritise market stability over flexibility.
An early morning rebound in the WTI oil price helped boost the NOK. However, the upward momentum in both has now faded. WTI is now down more than 3%, and its price looks to be falling below US$30/barrel.
The GBP/USD was a poor performer overnight. It fell sharply after data showed a plunge in UK industrial production in November. Downward momentum in the currency then continued through this morning, taking the GBP/USD to 1.4400.
The NZD/USD has traded a bit lower over the past 24-hours, as commodities remain under pressure and risk appetite subdued.
Yesterday’s December ANZ commodity (export) price index fell 1.8%.Dairy prices were the biggest drag, easing a further 3.5% in the month. Over 2015, the ANZ commodity price index, in world price terms, decreased 12.9%. But, because of the concurrent fall in the currency, prices in NZD terms were down a milder 1.1%.
Fortnightly GDT dairy auctions however remain the event more likely to elicit a notable market response. The next is scheduled for next week. The NZD/USD currently trades at 0.6530. Support continues to be eyed at the mid-Nov lows of 0.6430.
On the crosses, the NZD/GBP made gains after the disappointing UK industrial production release. From intra-night lows near 0.4490, the cross now trades at 0.4530.
The main driver of sentiment toward the AUD and NZD today will likely be the release of China trade balance data, due at 3pm (NZT).
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Kymberly Martin is on the BNZ Research team. All its research is available here.
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