By Kymberly Martin
Most currencies have traded reasonably contained ranges over the past 24-hours. The AUD has outperformed the NZD.
The NZD/USD trades just below 0.7000 this morning.
Markets remain in a fairly buoyant New Year mood, though lacking new catalysts. Our global risk appetite index remains at a healthy 75%.
Overnight, the US NFIB index of small business optimism surged to a level not seen since the end of 2004. Spurred by the prospect of America being made “great again”, evidence will likely need to quickly follow, if this optimism is not to be deflated.
The USD index traded an unexciting sideways range overnight against its European peers. The GBP/USD made intra-night lows near 1.2110, probing at the lower-end of the range established in October last year. However, it has subsequently rebounded to 1.2150.
With limited global data scheduled tonight, the testimony by the Bank of England’s Carney to lawmakers early tomorrow morning may dominate headlines. This is especially true given recent renewed market speculation regarding the prospects of a ‘hard Brexit’.
The NZD has again underperformed the AUD. While the AUD has essentially traded sideways over the past 24-hours the NZD/USD has drifted a bit lower. This has seen the NZD/AUD trade down to below 0.9500. The 200-day moving average sits a little lower, at 0.9440. In the months ahead we continue to see the cross trading a range around the mid-90s, as opposed to having a strong directional bias.
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