By Dan Bell
The NZD/USD rallied to a high of 0.8366 as risk assets surge overnight.We open this morning around 0.8350.
US equities are up across the board with the Dow Jones Index up 2.97% while commodity prices, as measured by the CRB Index, are up 0.8%, led by oil prices up 2%.
Gold prices have come under heavy profit taking overnight, down over 3% from recent highs over US$1,910 to settle around US$1,830 this morning.
Economic data from the US was weaker than expected overnight with US Richmond Factory Index dropping to a 2 year low of -10, and New Home Sales falling to a 5 month low.
German ZEW Economic Sentiment index tumbled to -37.6 the lowest since December 2008, from -15.1 in July.
As there was no positive news to speak of overnight, market moves are being justified by expectations US Fed Chairman Ben Bernanke will announce another round of policy stimulus at his Jackson Hole speech on Friday.
The NZD is marginally stronger against the major cross rates and opens around the current levels: 0.7930 AUD, 0.5770 EUR, 0.5050 GBP, 64.00 JPY.
Today we get NZ Merchandise Trade numbers for July at 10:45.
Tonight the market will be focusing on US Core Durable Goods Orders for further signs of weakness in the US economy.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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