The New Zealand Dollar has taken front and center stage on Tuesday with the single currency racing higher on the back of some solid current account data and news that local dairy giant Fonterra has raised its payout forecast to farmers. Also seen bolstering the antipodean to fresh 2009 highs has been the NZIER’s upwardly revised economic growth forecasts for the first time in over a year. Currencies in general are back on the bid with any USD rallies from Monday being negated thus far on the session. Global equity and commodity prices have also rebounded on Tuesday and it remains to be seen whether or not we will even see a more significant corrective pullback in these markets that many had been looking for. Sterling also remains relatively weak with the currency getting hit hard of late against the Euro, Aussie and Kiwi. The more downbeat assessment from the BoE and general shift in sentiment towards the economy of late has been seen as the primary driver for the weakness. Meanwhile UK PM Brown has come out saying that continued stimulus is vital for the global recovery, while also downplaying any talk of a quick exit strategy. Elsewhere, the currency head at UBS has been on the wires overnight saying that the G7 should deal with the falling USD and initiate some form of a coordinated intervention to prop the beleaguered currency. Looking ahead, the economic calendar in Europe is extremely light with the only key releases coming from Switzerland in the form of Swiss SECO economic forecasts at 5:45GMT, followed by the trade balance at 6:15GMT.
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