By Kymberly Martin
'Commodity-linked’ currencies have been the strongest performers over the past 24-hours. The JPY has weakened a little further.
The WTI price has extended its rebound, along with a general rise in commodity prices. The broad CRB global commodities price index sits 2.0% higher this morning, while the WTI oil price is back above US$41/barrel.
The ‘oil-linked’ NOK has been the strongest performer, gaining more than 1.3% against the USD since this time yesterday.
The NZD is not far behind. It made steady gains throughout yesterday and overnight. The modest positive result from the overnight GDT dairy auction (+3.8%) allowed the upward momentum to continue unabated.
The NZD/USD now sits at its highest level since mid-June last year, at 0.7040. The NZ TWI, at 73.80, now sits 4% above the RBNZ’s projections for the current quarter average, as at its March MPS.
However, overnight in a scheduled speech, RBA Governor Stevens said that the phrase “currency wars” is an unfortunate one. He believes the debate is around different jurisdictions following policies to try and promote local growth. When asked why the RBA has backed off jaw-boning down the AUD, he said “you don’t say the same thing when it’s 70-something as you did when it was 90-something”.
The AUD/USD has also been on a steady upward path overnight, and now trades at 0.7820, its highest level since mid-June last year.
European currencies are stronger against the USD overnight.
The GBP/USD has poked its nose above 1.4400, with the top of its range of the past couple of months, at 1.4500, now in sight.
This evening, UK employment data will be released. However, in the run-up to the June Referendum on EU membership, UK data points will likely take a back seat to the twists and turns of politics and voting polls.
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Kymberly Martin is on the BNZ Research team. All its research is available here.
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