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The Opening Bell: Where currencies start on Wednesday, August 31, 2011

Currencies
The Opening Bell: Where currencies start on Wednesday, August 31, 2011

By Alex Hilll

 Investor risk appetite was dealt a blow overnight as US consumer confidence fell to its lowest level in 2 years. The NZD remained resilient in spite of this, posting fresh 1 month highs at 0.8558 against the USD.
 
Gold raced 2% higher overnight, fuelled by the release of the minutes of the Federal Reserve’s August 9th meeting. This revealed that at least some US central bank members were in favour of further monetary stimulus and an extension to their programme of asset purchases.
 
In the Eurozone, Finland led a call for Greece to provide collateral in return for further aid, something subsequently backed by the Netherlands, Austria, Slovenia and Slovakia. Elsewhere the ECB was seen buying Italian 10 year bonds in an attempt to support prices.
 
This afternoon sees the release  of the NBNZ Business Confidence measure. Offshore the US ADP unemployment report will dominate overnight.

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Alex Hill is a currency strategist at HiFX in Auckland. You can contact him here

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