By Dan Bell
The NZD/USD has followed improved risk sentiment and opens around a 5 week high of 0.8060/0.8090.
Markets have been trading with more optimism as European policy makers appear closer to an agreement on recapitalizing their banks and leveraging their rescue fund- final decisions have been deferred until a second summit on Wednesday.
Investors have been also been more upbeat on a a rise in China's flash purchasing managers' index, suggesting a rebound in manufacturing in the world's second-largest economy after three months of contraction.
Commodity prices are broadly higher with the CRB Index up over 2.4% led by Copper prices up over 6%. Global stock markets have also had another positive night with the S&P 500 up 1%.
The US Dollar is weaker across the board with the AUD/USD briefly touching an interbank high of 1.05. The EUR has also performed strongly and opens around 1.3930.
The NZD is weaker against the AUD and opens around 3 month lows of 0.7710/0.7530 this morning. The surge in base metal prices overnight has supported a bigger move in the AUD/USD overnight.
Against the other major cross rates the NZD is higher and opens around 0.5800 EUR, 0.5050 GBP and 61.40 JPY.
On the local front we get NZ Q3 CPI at 10:45 this morning with the market expecting +0.8% for the quarter. The focus offshore continues to be EU related headlines with particular emphasis on the result of the summit on Wednesday.
-------------
Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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.