By Dan Bell
The NZD/USD opens higher at 0.8315 this morning are posting a strong rally yesterday afternoon.
The NZD got a shot in the arm from the AUD. Surprisingly strong Australian retail sales figures together with a more balanced statement from the Reserve Bank of Australia yesterday caused the markets to push back expectations on further Australian interest rate cuts. This resulted in strong up move for the AUD, and the NZD came along for the rise.
The euro-zone manufacturing sector contracted, while the massive US services sector expanded at its fastest pace in 12-months.
The US Dow Jones Index established a new all-time high today when it surpassed the previous October 2007 best.
However the more broad-based S&P500 index is 2.2% below its record. The Shanghai Stock index bounced back 2.3% (having dropped 3.6% the previous day) after China pledged to maintain economic growth at 7.5%. This also added the NZD.
Gold price climbed 0.3% to USD$1575 an ounce. Base metal prices were higher across the board, with Copper up 0.5%, and Nickel was the standout at +1.1%.
World equity markets notably higher. The US indices were circa 1% higher, while the UK & Euro-zone indices climbed between 1.3% to 2.4% overnight.
The NZD opens at 0.8315 USD, 0.8115 AUD, 0.6375 EUR, 0.5500 GBP, & 77.55 JPY.
There is no data scheduled on the domestic calendar today.
Australian quarterly GDP data will be released at 1:30pm, followed by euro-zone GDP tonight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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