By Dan Bell
The NZD/USD opens just under 0.7800 this morning, after trading to a low of 0.7735 and a high of 0.7805 overnight.
Markets have had a relatively quiet night. Standard & Poor's confirmed they have put 15 of the 17 euro-zone nations on credit watch for a possible downgrade but this was leaked to the media yesterday so most damage had already been done.
Fonterra Milk Auction results have come in this morning with prices up 2.6% on the previous result.
European stocks were mostly lower across the board despite much better than expected German Manufacturing Orders which rose 5.2% in October- suggesting the German economy may still be one bright spot in the EZ.
US markets are still open and are currently up slightly with the Dow Jones Index +0.3%. Commodity prices have also had a quiet night with the CRB Index flat.
The Reserve Bank of Australia cut interest rates by 25 bps yesterday which has seen the NZD/AUD drift back up over 0.7600. Markets are now forecasting further cuts from the RBA over the next few months as they maintain an easing bias.
The Bank of Canada left interest rates on hold at 1%.
The NZD is relatively unchanged against the European cross rates and opens around 0.5810 EUR and 0.50 GBP.
Nothing to report from the local calendar today. From Australia we get Q3 GDP at 1:30 NZT with markets expecting growth for the quarter to come in at +1.2%.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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