By Dan Bell
Markets turned negative overnight as EU debt crisis woes continue to weigh on sentiment.
Credit Rating agency S&P’s Chief Economist said time was running out for the euro zone to resolve debt problems.
Moody’s and Fitch have joined S&P on putting the major EU economies on review for possible credit downgrade.
Global stock markets are weaker across the board with the Dow Jones Index currently down 1.97%. European markets were hammered with the German DAX -3.36% and Spain’s key index down 2.6%.
Commodities followed suit with Oil prices down 1%. Gold is off 2.8%, Silver down 3.7% and Copper -2.78%.
The EUR/USD broke through key support around 1.32/1.325 which saw stop loss selling take the currency to a low of 1.3176 and drag the NZD and AUD down with it. The AUD/USD opens around 1.007 this morning after trading to highs last week over 1.0350.
The NZD is weaker against the major cross rates and opens at current indicative levels- 0.7560 AUD, 0.5780 EUR, 0.4890 GBP, 59.40 JPY.
Not much to report on the local front today- Food Price Index out at 10:45. From Australia we get NAB Business Confidence at 1:30 and Housing Starts.
Tomorrow morning is the US Federal Reserve interest rate and the FOMC statement which will be worth watching for any hints on further quantitative easing.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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