The NZDUSD opens at 0.8395 this morning after an eventful Wednesday.
The Reserve Bank of NZ Governor Wheeler spiced things up when he stated the RBNZ had sold NZD, that it was designed to take the top off the currency, and they were capable of intervening further.
This surprised the market as there had been no talk or rumours of RBNZ intervention - the NZD dropped nearly a cent in response to trade to a 0.8365 low.
Governor Wheeler had mentioned earlier that the NZD is “significantly overvalued”, that an unchecked housing market would result in higher inflation, and that there is scope to cut interest rates if house price risks are removed. These statements had little impact on the NZD.
Overnight, Stanley Druckenmiller, a former hedge fund manager and well known investor, said to avoid all commodity currencies including those of Brazil, South Africa, and Canada, and said the value of the AUD could “come down hard”. Whilst he didn’t specifically mention the NZD he may as well have.
EURUSD leapt to a 1-week high on positive German data.
NZDGBP hit a 3-moth low of 0.5390.
Global equity markets rose across the board, with new all-time highs reached in the German Dax, US Dow Jones and S&P500 indices.
The Gold price jumped 1.3% to USD$1472 an ounce, and base metal prices were higher across the board.
The NZD opens at 0.8395 USD, 0.8255 AUD, 0.6385 EUR, 0.5405 GBP, & 83.15 JPY.
NZ employment data will be released at 10:45am, followed by Australian employment figures at 1:30pm. These both have the potential to cause more volatility in the NZD.
Chinese inflation, new loans, and money supply data will be released this afternoon.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »
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