The New Zealand Dollar rallied during the overnight session to be the second-best performing currency over the past 24 hours. A stark reversal on the Asian session, the Kiwi, initially dipped to a low of 0.6883 before rebounding strongly on the back of improved risk appetites and positive headlines out of Europe. Opening this morning at 0.6985 against the Greenback, the NZD continues to test key resistance at the psychologically important level of 0.7.
With all eyes on the political headlines out of Italy, markets reacted strongly to news of the Italian bond market easing and a new attempt at forming a government. 2-year Italian bond yields fell just over 100bps on the day, reversing more than half of the incredible move higher on Tuesday night. The news calmed markets across the world, including the NZD market which saw almost an immediate impact. While the rhetoric in Italy remains fluid at best, the market welcomed the relief nonetheless.
The Kiwi also outperformed against all of its’ crosses, posting 0.6 against the Euro, a four-month high against the Sterling at 0.5260 and 0.9223 against the Aussie. Closer to home, Investors now turn to the ANZ Business Survey as the key local focus for direction.