The New Zealand dollar has so far been able to hold its own relatively well against the dollar despite the latter breaking to new multi-year highs against the likes of the euro and Swiss franc, and multi-month highs versus the yen. But the bullish days for the NZD/USD currency pair could be numbered.
For obvious reasons, all the focus is on the OPEC meeting. As we pointed out the possibility yesterday, oil prices have bounced back very strongly today on renewed hopes that oil ministers will, after all, be able to hammer out a deal later on to limit crude production.
As we reported the possibility on Friday of last week (see “Gold on shaky footing as dollar surges to highest since 2003” for more), gold did indeed fall further lower this week. The rising dollar, yields and United States equity prices all weighed on the appeal of the buck-denominated, noninterest-bearing and perceived safe-haven precious metal.
Some of the mainland European stock indices eked out small gains last week despite the falls in United States, UK and Japanese stock markets. However, at the start of this new week, global equities have rebounded across the board while the dollar has extended its gains further against a basket of foreign currencies.
Stocks found some much-needed support this week on the back of a rising oil price to $50 a barrel and as concerns about the negative impact of a potential June Federal Reserve rate increase diminished.