Kiwi climbs on renewed optimism
Market Highlights
New Zealand: NZD/USD Past 5 days
International: EUR/USD Past 5 days
Today's commentary
The Kiwi spent yesterday struggling to make a move in either direction, before an early morning boost saw it leap up against the big three currencies.
The local session saw the Kiwi and AUD continue to find support as investors took a more optimistic view heading into the new year. This optimism is being driven by proposed tax cuts in the US and Germany and their hoped ability to prop up the world’s and Europe’s largest economies. This support translated across the JPY and EUR as well, allowing the Kiwi to stay strong (relatively) against both yesterday.
The USD had another strong night against the EUR, as President-elect Obama’s time in Washington continued to build hope for the struggling economy. With Obama announcing yesterday that he’s prepared to do whatever is necessary to pull the economy out of recession a surge of optimism entered the market. This saw the USD rise against most currencies, except for the ‘commodity currencies’ (Kiwi, AUD etc), who - with their considerably higher interest rates - rose further on this return of risk appetite.
Today sees the release of the NZ trade date this morning – though the results (less exports, higher imports) shouldn’t be a surprise. We’re also waiting for the release of the Fed’s notes from their December rate cut announcement, which should keep things interesting for the markets today.
Upcoming Announcements
- 7 Jan 2009: NZ Trade Balance (Nov 08)
- 7 Jan 2009: AU Retail Sales (Jan)
- 7 Jan 2009: US Fed OMC Meeting Minutes
- 8 Jan 2009: UK BoE Interest rate announcement
- 9 Jan 2009: US Nonfarm Payrolls (Dec)
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