By Kymberly Martin
NZ Dollar
After yesterday morning’s post-US FOMC volatility the NZD/USD soon stabilised.
It has inched up to trade at 0.8140 this morning.
Yesterday morning’s 2Q NZ GDP data showed a 0.7%q/q expansion following the hefty 1.0% gain in 1Q. This took annual growth to 3.9%, the swiftest in ten years.
This was close enough to the market’s expectation (0.6%) and the RBNZ’s (0.8%) not to cause too much excitement. The NZD/USD found support at the 0.8080 level, before clawing its way back to 0.8140 this morning, in the backdrop of a weaker USD overnight.
Key NZD/USD support remains at the February lows in the vicinity of 0.8050-0.8060. Resistance is eyed approaching 0.8200.
On the crosses, the NZD has been fairly range-bound relative to its European peers but has pushed steadily higher relative to the AUD. The NZD/AUD trades just below 0.9070 this morning.
Today NZ consumer confidence, job ads, credit card billings and net migration data will be released.
The pick of these will be the August migration results, given the RBNZ’s current focus on this data, and musings as to the demand and supply implications.
Then it will be all eyes on Saturday’s general election results. However, if there is no clear majority, negotiations on the final form of Government could run into next week.
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Majors
The USD gave back much of yesterday morning’s gains overnight. Outsized gains were made by the NOK and SEK.
Sentiment in markets was generally quite buoyant overnight, post the US FOMC meeting. Equities recorded positive returns on both sides of the Atlantic. The Euro Stoxx 50 closed up 1.0% while the S&P500 is currently up 0.4%.
US data was generally undershot expectations overnight. Aug housing starts fell 14.4%m/m (-5.2% expected). The US Philadelphia Fed business survey declined from 28.0 to 22.5. The USD index drifted down from afternoon highs above 84.70 to sit around 84.30 this morning.
The uptake of the ECB’s first tranche of targeted longer-term loans (TLTROs) was on the lower side of expectation, at €82.6b. The median estimate had been for €150b. Still, the EUR/USD has managed to push up from 1.2860 to 1.2920 overnight.
The GBP/USD has pushed higher overnight in the lead-up the Scottish Referendum results being released today (NZT). The GBP appears to be anticipating a ‘No’ vote to Scottish independence. However, a further relief rally could still occur on that outcome. Results will dribble out from early afternoon with the final count being available at 5pm (NZT).
The Norwegian kroner (NOK) surged against the USD overnight after Norway’s central bank meeting. It left its cash rate at 1.5%, as expected. But it dropped a reference that it could cut this year and signalled a small chance of a rate increase in early 2016. The NOK has gained almost 2% relative to the USD over the past 24-hours to sit at 6.32 this morning.
The data agenda is light this evening. The Eurozone releases July current account data. Over the weekend G20 finance ministers and central banks meet.
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