By Kymberly Martin
The USD has traded modestly lower over the past 24-hours. The NZD and AUD have been beneficiaries.
In a reasonably quiet opening to the week commodities and US equities have made gains.
The CRB global commodity index is up 1% while WTI oil price futures have risen 3%. Prices now sit at their highest level since November last year, having secured a 55% rebound since their January lows.
The S&P500 is currently up almost 1%, led by commodity related companies.
The USD drifted lower from early in the evening. A disappointing US Empire manufacturing index also seemed to ensure that enthusiasm for the USD remained muted overnight.
European currencies were beneficiaries of the move but the JPY remained weak. From 108.50 yesterday morning the USD/JPY now trades at 109.05.
The AUD and NZD felt a little downward pressure at the open yesterday following the disappointing China data releases over the weekend. However, both currencies have been on a fairly steady ascent since yesterday afternoon, likely assisted by the positive sentiment toward commodities overnight.
In this respect the NOK and CAD were also strong performers. The AUD/USD has arrested its recent decline, poking its head back above its 200-day moving average of 0.7260. The AUD/USD now trades at 0.7290.
The NZD/USD also sits a little higher this morning, at 0.6790 currently. The NZD/AUD dipped below 0.9280 early yesterday afternoon but has since recovered. It now trades at a similar level to yesterday morning, just below 0.9320.
There will be two points of focus for the cross today, the release of the RBA’s Minutes and the RBNZ’s inflation expectations survey. The risks are tilted towards neither providing ammunition for the market to increase expectations for Central Bank rate cuts.
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