EU summit fails; markets take off higher. Go figure. NZ$ rises against most currencies

EU summit fails; markets take off higher. Go figure. NZ$ rises against most currencies

Optimism flooded the world's markets overnight, and the NZ dollar has soared up more than 1 USc as it approaches the weekly close in New York.

While the US was shopping, global stocks and the euro climbed on signs of progress in talks about releasing aid to Greece, and an influential German survey that found business sentiment had improved in Europe's largest economy.

The Greeks say the IMF has relaxed its debt-cutting target for the country and "only a €10 billion gap" remains to be filled for a vital aid installment to be paid.

And all this happened despite the EU summit talks breaking up without agreement - actually "with disagreement" may be the better phrase. Leaders failed to agree on the 27 nation bloc’s next seven-year budget, replaying the clash between rich and poor countries that has stymied the response to the euro debt crisis. It has been English prime minister Cameron's hard line on the EU spending plans that is the main talking point.

It is also becoming clearer that remediation work in the US following 'superstorm' Sandy may add more than US$¼ trillion to the US economy, or about 1.5% - a very big boost - and much of it related to employment.

Markets have bid gold up to US$1,750/oz, its highest in a month. Oil is also up more that US$1/barrel. Having said that, in NZ$ these commodity rises are minor. The currency move signals equity markets are actually saying 'risk on'.

The NZ$ is also gaining on the AU dollar in late trade, and is higher against the yen and the UK£ too.

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

1 Comments

Comment Filter

Highlight new comments in the last hr(s).

The currency move signals equity markets are actually saying 'risk on'.
 
For whom one has to ask?
 
By the way David "bps" are the minimum ticks for interest rates - "pips" are the equivalent for currencies.