NZD crosses slide
After the weekend’s bout of USD weakness the NZD come out an underperformer compared to the other major currencies. Although still making gains they were not enough to offset the NZD crosses falling. Yesterday’s local session saw the NZD remain well supported reaching a high of 0.6737. However overnight the NZD fell to lows of 0.6683 as investors took profits and in particular sold against the strengthening AUD. The NZD/AUD cross fell to a low of 0.8585 overnight. This morning the NZD opens near overnight lows at 0.6688.
AUD breaks through 0.7800 to new highs
The AUD spent half of yesterday’s local session making further strong gains to a six month high of 0.7820. However the AUD was sold back to lows last night of 0.7763 as investors in UK and Europe opened Monday’s morning session taking profits on the week’s solid gains. The gold price continues to rise as the USD softens adding support to the AUD. The AUD opens today at 0.7780.
USD steady but fears of further weakness remain
The USD’s eroding yield advantage continued to weigh against the currency yesterday before recovering slightly overnight when French Finance Minister Thierry Breton suggested that some vigilance was required, following the dollars recent decline. He further stated that the recent weakness would also be discussed at an upcoming meeting of European finance ministers. The dollar’s recent moves have prompted a number of comments from various officials including Eurogroup Chairman Jean-Claude Juncker who stated he was not concerned by the euro’s current level and that a critical point was “lengths away”, and OECD Secretary General Angel Gurria who said that the euro’s strength posed productivity and competition risks for Europe and that the dollar could drop further if the US current account deficit remains high.
Japanese corporate services prices up 0.1%yr in October. That compares to a 0.3% pace in September, which was the high for the cycle so far. The series remains trifurcated in its detail. Clear readings on domestic pricing power, such as advertising costs, remain subdued. Clear readings on energy related sectors show solid gains on a year ago. And then there are the shades of grey in the middle, such as finance (up a little) and real estate (down a little). In short, corporates are still given the control of costs a heavy priority, delaying the recovery of prices, wages and the consumer in the process.
No major data to report.
