By Dan Bell
The NZD/USD opens at 0.8230 this morning, having ranged 0.8224 to 0.8295 overnight.
The US Govt is set to begin ‘sequestration’ - across-the-board automatic federal spending cuts, which threatens the economic recovery.
However, the markets do not appear too concerned at this point in time and the USD rallied on strong US economic data - manufacturing figures, consumer spending , and consumer sentiment.
The EUR/USD dropped to 2 ½ month low on the above and speculation the European Central Bank may take action to halt the economic deterioration in the euro-zone.
Low euro-zone inflation and the political instability in Italy is also paving the way for ECB action.
Gold price fell on Friday, posting its 3rd straight weekly decline, while other commodities such as copper and crude oil suffered sharp losses. Gold price is currently at USD$1576 an ounce.
World equity markets were mixed. The US indices climbed 0.25%, while the Euro-zone stock markets fell between 0.4% & 0.6%, while the UK index rose 0.3%.
The NZD opens at 0.8230 USD, 0.8070 AUD, 0.6325 EUR, 0.5470 GBP, & 77.05 JPY.
The ANZ Commodity Price Index hit the tapes at 1:00pm today – we don’t expect this to be much of a market mover. The only other piece of NZ data this week is Manufacturing Sales figures in Friday.
Australian Building Approval, Job Ads, and Company Operating Profits will all be released at 1:30am. Tonight brings Spanish unemployment, Euro-zone Investor Confidence, and some US Fed-speak.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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