By Dan Bell
The NZD/USD opens at 0.8440 this morning, having hit a 17-month high of 0.8534 Friday afternoon.
Friday’s quarterly NZ Retail Sales figures surprised on the upside (2.1% versus 1.3% expected), suggesting the economy is over its soft patch.
This sparked an aggressive rally in the NZD/USD to 0.8534, a level last seen in September 2011. The NZD/GBP touched an all-time high of 0.5507, while the NZD/AUD reached a 2 ½ year of 0.8210.
The G20 finance ministers and central bankers, who met over the weekend, have stated they will “refrain from competitive devaluation” and “will not target our exchange rates for competitive purposes.”
However, this will do little to keep exchange rates stable as central banks continue to pump money into economies in an attempt to kick start growth.
World equity markets were mixed. The US indices were little changed, while the Euro-zone stock markets dropped between 0.4% & 0.7%, while the UK index closed marginally higher.
Gold prices tumbled to USD$1609 as the precious metal suffered it biggest weekly loss in 9 months. Oil & Copper prices fell while other base metals prices were mixed on the day.
The NZD opens at 0.8440 USD, 0.8195 AUD, 0.6320 EUR, 0.5440 GBP, & 79.05 JPY.
There is no domestic data on the calendar today and we expect things will be relatively quiet with the US Presidents’ Day holiday Monday.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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