By Kymberly Martin
NZ Dollar
The NZD/USD has traded a relatively tight range over the past 24-hours, sitting just below 0.7420 at present.
The NZD/USD has traded between 0.7390 and 0.7440 over the past 24-hours, inching its way off the lower levels in the early hours of this morning.
Relative calm has descended on currency markets after the excitement at the end of last week.
We continue to see near-term resistance for the NZD/USD at 0.7450.
With another relatively quiet 24-hour period ahead on the domestic and global data front, it is difficult to see this level being seriously tested.
On the crosses the most notable move overnight was for the NZD/JPY. As the JPY was broadly weaker the NZDD/JPY pushed up from 87.80 to 88.50, right on the 200-day moving average. The NZD/JPY has now retraced almost half of its sharp January fall from 94.00.
The NZD/AUD has continued its upward momentum to trade at 0.9530 this morning.
Today will bring only low-key data releases on both sides of the Tasman. In NZ, Jan credit card retail spending data is due.
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Majors
Most currencies have traded fairly tight ranges over the past 24-hours. Most notable has been a decline in the JPY.
In the absence of major data releases or headlines overnight, markets maintained an air of relative calm. Our global risk appetite index, remains at a modestly cautious 47%. Equity markets on either side of the Atlantic have provided moderate positive returns (Euro Stoxx, +1.1%, S&P currently up 0.7%). The standout mover was the oil price. The WTI oil price is currently down 4%. Still, it remains more than 15% off its late-Jan lows.
The USD pushed a little higher overnight, with some early morning volatility. The US Dec JOLTS Job Openings data (5028 vs. 4983 expected), suggest further labour market strength and a pickup in wage growth. The USD index trades at 94.70 currently.
Meanwhile, in the Eurozone, there were conciliatory murmurs from Greece. ECB’s Weidmann also reiterated that the Eurozone is less vulnerable than a few years ago to financial stability risks. He said banks are more stable with less Greek exposure and less prone to contagion. From intra-night lows around 1.1280 the EUR/USD now sits around 1.1320.
The JPY was on the back-foot for most of the evening. From 118.60, the USD/JPY broke higher to trade around 119.40 at present. As diverging US/JP monetary policies become entrenched, we expect the USD/JPY to trade toward the mid-120s in the year ahead. Today, Japan’s machine orders for December will be released.
The AUD fell from favour overnight. Yesterday’s NAB business survey (Jan) pointed to a still soft economy, with little momentum, weakfish confidences but considerable difference across sectors. From later afternoon highs above 0.7840 the AUD/USD now trades around 0.7780. Today the AU Westpac consumer confidence index for Feb will be released.
It is a sparse global data calendar tonight so expect attention to focus on Greek negotiations and Fed speak. Fisher is due to speak to economists in NY, early tomorrow morning.
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