By Dan Bell
The NZD/USD opens lower at 0.8420 this morning, having dipped to a 6-day low of 0.8390 overnight.
Very disappointing Australian retail sales for December (-0.2% versus +0.5% expected) resulted in a sharp fall in the AUD/USD – it continued lower overnight to trade at a 2 ½ month low.
The NZD/USD followed the AUD/USD lower in tandem, to briefly trade below 0.8400.
The EUR/USD gave up its previous day’s gains ahead of the European Central Bank interest rate policy meeting tonight.
The impact on the euro-zone economy of the high EUR/USD is likely to feature, although they ECB are not expected to alter interest rates.
Recent US data has been better than forecast, adding to the view that the US economy is gradually improving.
The NZD/JPY hit a new 4 ½ year high of 79.37 on new the Bank of Japan Governor will step down 3-weeks earlier than planned.
The NZD/AUD traded as high as 0.8170 overnight – a level last seen in July 2010.
World equity markets suffered small losses across the board. The Dow Jones closed 0.2% lower, while the Euro-zone stock markets dropped circa 1.2%.
Gold prices edged higher to USD$1676. Oil, Copper and other base metals prices fell on the day, with Nickel falling over 2%.
The NZD opens at 0.8420 USD, 0.8160 AUD, 0.6230 EUR, 0.5370 GBP, & 78.60 JPY.
NZ Employment data will be releasesd at 10:45am today, followed by the Australian Employment figures at 1:30pm.
The Bank of England and European Central Bank both have interest rate setting meetings overnight.
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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here
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