By Dan Bell
The NZDUSD opens at 0.6732 (mid-rate) this morning.
The Dollar index (DXY) is trading at its highest level in 16 months as Brexit and Italian budget concerns weigh on the British pound and the Euro and global equity markets sell-off.
Hopes of an emergency EU summit this month faded after chief EU negotiator Barnier reported to EU Brexit ministers that there has been no notable progress on the Irish boarder issue following negotiations with his British counterparts which concluded at 2:45am on Monday. Although negotiations will continue this week unless there is significant progress by Wednesday evening there will no EU summit is sign a draft deal in November.
Italy has until the end of the day to present a revised drat budget proposal to the European Commission after the first was rejected on grounds that it did not comply with the European Union’s rules on debt. The original proposal was rejected after the Italian government proposed a 2.4% deficit target for 2019 with the European Commission arguing that the budget submitted would lead to a 3.1% deficit which is well above the EU’s limits.
The NZD is the most resilient of the emerging market currencies and has kept pace with both the USD and the JPY during this risk-off move. The NZD continues to be well supported following last weeks unexpected employment report and is trading at its highest levels against the EUR and the GBP since June this year.
Global equity markets remain mixed, – Dow -1.57%, S&P 500 -1.24%, FTSE -0.74%, DAX -1.77%, CAC -0.93%, Nikkei +0.09%, Shanghai +1.22%.
Gold prices are trading marginally lower $1,203 an ounce. WTI Crude Oil prices are up 1.4% trading at $61.06 a barrel.
Current indicative rates:
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Dan Bell is the senior currency strategist at xe money transfer in Auckland. You can contact him here »