By Dan Bell
It’s been up the stairs and now down the elevator… yet again.
The NZD/USD has slumped overnight to the low 8200’s as renewed fears about Europe’s debt crisis and a raft of weak US economic data saw investors seek safety.
European investors have cited fears of the effects of a short-selling ban on financial stocks, as well as politicians’ lack of plans of how to address the euro zone debt crisis.
European banking stocks fell almost 7%, as the market focuses on its exposure to the bad European debt.
The US outlook was also poor with New Home Sales down, jobless claims up and the Philly Fed Manufacturing Index saw it’s lowest level since March 2009.
The Dow Jones currently down -4%, S&P -4.5%, FTSE closed -4.49%, CRB Index -2.33%.
The NZD is lower against the major cross rates around 0.5730 EUR, 0.7905 AUD, 0.4970 GBP and 62.85 JPY.
Risk remains lower on the day as we watch the Asian markets react to this return to risk.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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