Kiwi remains steadfast with Frankenstorm

11.12 NZST, Wednesday 31 October 2012

Kiwi remains steadfast with Frankenstorm

By Andrew May (Sales Trader, CMC Markets New Zealand)

The New York Stock Exchange remained closed for another night as chaotic Hurricane Sandy continued to wreak havoc heading west over lower Manhattan. The damage to the eastern starboard of the US coast is estimated to be well over US $20bln. Not since Hurricane Katrina has the US ensued such a catastrophic and deadly toll.

Stock and Bond markets were closed making this the longest shutdown of US financial markets since 1888 due to the weather. Economists estimate that 'Frankenstorm' could reduce US GDP by 0.1- 0.2%, however as the weather begins to calm over New York and the clean-up begins, it is looking highly likely most markets will reopen for Wednesday.

The New Zealand dollar experienced little turbulence holding a firm footing just over US 82c treading a robust weeklong 0.8185-0.8225 range. The Kiwi is at present little tested showing risk sentiment is steadfast and true. This is regardless overnight of The Bank of Japan's 11 trillion YEN injection to their existing QE programme.

Little domestic data is expected this week. The NZD is however expected to jump to the tune of this Fridays US inflationary gauge and jobs numbers. An increase of 15-25k to the NFP should bolster further demand for risk assets and could see the NZDUSD retest 0.8240-50 levels as we move towards the US election.
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