By Kymberly Martin
NZ Dollar
The NZD has been the strongest performer amongst its peers over the past 24-hours, rising 0.6% relative to the USD. The NZD/USD trades at 0.7970 this morning.
Yesterday morning’s domestic data releases confirmed the NZ economy is on a very sound footing.
The Performance of Services Index crept a little higher in September, to 58.0. Strength was seen across the board, pointing to stronger than normal expansion in the services sector, and notably so for employment.
The ANZ Consumer Confidence Survey (123.7) pointed to above-trend growth in household expenditure.
But the ascent in the NZD/USD did not really take hold until the evening, when the USD more broadly, declined.
From early evening lows around 0.7930, the NZD/USD has moved up to trade at 0.7970. Stiff resistance will likely be encountered on any move up toward 0.8000. Support is eyed at 0.7910.
Today, NZ net migration data will be released for September. NZ credit card billings are also due.
It will likely be China data delivery (3pm NZT) that sets the tone for the cross however.
In the case of any disappointment, the NZD may hold up better than the AUD. This morning the NZD/AUD trades around 0.9070.
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Majors
The USD weakened slightly overnight, with the NZD and AUD key beneficiaries.
Market sentiment remains fragile, although our risk appetite index (scale 0-100%) has rebounded from last week’s lows. From 32% the index now trades at 47%. In a data-light evening the market focused on the US Q3 earnings reporting season. On aggregate, earnings continue to surprise to the upside, though poor delivery from IBM overnight grabbed attention. The Euro Stoxx 50 closed down 1.2%, though the S&P500 is currently up 0.6%.
Overnight, Eurozone current account data for August (s.a) came in at €18.9b, with upward revision to the previous month. The EUR/USD pushed up from early evening lows, close to 1.2730, to trade around 1.2800 currently.
Meanwhile, UK house price data for October showed a 7.6%y/y rise, slightly down from the previous month. London house prices however, were up 7%m/m to be running at 9.6%y/y, enough to keep the BoE alert. The GBP/USD sits higher this morning at 1.6160.
The AUD was on a fairly steady uptrend overnight, against the weaker USD. It could be a busy day for the AUD today. Not only are the RBA’s October Minutes due, but there is a slew of China data scheduled for release.
The RBA Minutes are expected to reinforce recent themes-unemployment is still rising and policy will remain unchanged for a prolonged period, despite the rising concern on investor housing activity. Perhaps more important for the AUD, will be signals from Chinese data due today. Consensus expects September industrial production to have ticked up to 7.5%y/y. Q3 GDP is expected at 7.2%y/y, down from 7.5% in the prior quarter.
Elsewhere, the UK announces its public finances this evening. The Eurozone releases Debt/GDP ratios for 2013. In the US, existing home sales data are due.
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