The NZD is tracking higher this morning, as is in fact the best performing G10 currency over the past 24 hours.
The NZD rallied yesterday afternoon after interim Reserve Bank Governor Grant Spencer said the central bank is adopting a more flexible approach to inflation and that “It may be appropriate for monetary policy to put relatively more weight on output, employment and financial stability relative to inflation.”
This morning’s Global Dairy Trade (GDT) auction broke its recent downward trend, with the price index nudging up by 0.4% following four consecutive decreases. Whole milk power (WMP) and skimmed milk powder (SMP) prices both improved up 1.7% and 4.7% respectively, while the big surprise was an 11.1% fall in the butter index. Overall volumes were down with 29,514 tonnes selling under the hammer, down from 35,000 tonnes at the previous auction on 21 Nov.
Although Euro-zone private sector growth accelerated in line with expectations, the EUR slipped lower on the news that German services activity slowed more than expected in November. After an initial reading of 54.9 economists had expected the index to fall to 54.7, slightly better than this last night’s final reading of 54.3.
The UK service sector growth in November pulled back from a six month high in October with the index dipping to 53.8, down from 55.6 and below economist’s forecasts of a 55.0 reading.
A larger than expected decrease by the US non-manufacturing index has had little effect on the dollar. This morning the Institute for Supply Management reported the index fell to 57.4 in November, down from 60.1 in October and below the forecast 59.0 reading.
Global equity markets are slightly down - Dow -0.15%, S&P 500 +0.15%, FTSE -0.16%, DAX -0.08%, CAC -0.26%, Nikkei -0.37%, Shanghai -0.18%.
Gold prices are down 0.8% trading at $1,273 an ounce. WTI Crude Oil prices have edged lower, down 0.4%, trading at $57.54 a barrel.
Current indicative rates:
NZDUSD 0.6881 0.5%
NZDEUR 0.5829 1.0%
NZDGBP 0.5121 0.7%
NZDJPY 77.57 0.5%
NZDAUD 0.9047 0.4%
NZDCAD 0.8735 0.5%
GBPNZD 1.9528 -0.7%
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