The NZDUSD opens lower at 0.6425 this morning.
Commodity based currencies such as the NZD & AUD took a battering Friday evening on the back of another nosedive in Chinese stock markets and heightened risk aversion. The NZDUSD fell to a 3 1/2 month low of 0.6385, while the AUDUSD plunged to 0.6825 – a level last reached in April 2009.
The USD fell to a 16 week low against the JPY and 2 1/2 week trough versus the EUR.
Weak US data (retail sales, producer prices, & industrial production figures all disappointed) and renewed drop in oil prices weighed on the USD; however this did little to help the NZD. While the GBP slumped to a 5 ½ low against the USD on concerns about the UK economic outlook.
It is light on the domestic data calendar this week, with nothing of note scheduled until the latest instalment of Fonterra’s Global Dairy Trade auction on Wednesday morning.
Global equity markets were sharply lower on the day - Dow -2.4%, Nikkei -0.5%, Shanghai -3.6 %, FTSE -1.9%, DAX -3.1%.
Gold prices rose almost 2% to USD$1,088 an ounce on Friday. Oil prices (WTI) plunged below USD$29.00 per barrel on global slowdown and further supply glut fears on the imminent rise in Iran’s oil exports.
Current indicative rates:
NZDUSD 0.6425 -0.8%
NZDEUR 0.5875 -1.5%
NZDGBP 0.4505 0.3%
NZDJPY 75.05 -1.9%
NZDAUD 0.9395 1.4%
NZDCAD 0.9385 0.9%
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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