11:10 AM (NZT) In the offshore session yesterday’s squeeze higher in risk assets continued ahead of the ECB offering to of 3year funding term loans to banks. Thus kept the US dollar on the back foot for the most part. 310billion EUR of funding was expected but demand was higher than expect and the total amount lent was a whopping 489 billion EURO.  The larger than expected demand for funding has spooked the markets a little, which are already suffering the holiday conditions of lower liquidity and the associated volatility. The US dollar has seen a resurgence as the spread between price of German and the peripheral Euro-zone debt again started to blow out. Further rumours of credit downgrades abound, and this further lent on risk assets.
 
Meanwhile just released NZ 3^rd quarter GDP numbers showed a +.8 increase in activity for the quarter against an expectation of a .6% number. The NZD initially made a little ground across the board, but overall the reaction was not dramatic. The increased activity looks to be driven by food manufacturing and retail, accommodation and restaurant spending. This can be attributable to the Rugby World Cup.
 
Expect market conditions to remain volatile for a next few weeks with the holiday period meaning that liquidity levels will remain low, accentuating moves.
 

					Past 24 hours
	Current level	Pre-NZ GDP	% Chge since NZ GDP		Low	High
NZD/USD	0.7706	0.7704	0.03%		0.7650	0.7778
AUD/USD	1.0100	1.0091	0.09%		1.0047	1.0220
NZD/AUD	0.7632	0.7632	0.00%		0.7597	0.7646
AUD/NZD	1.3103	1.3103	0.00%		1.3079	1.3163
NZD/GBP	0.4915	0.4911	0.08%		0.4878	0.4940
NZD/EUR	0.5905	0.5801	1.76%		0.5858	0.5912
NZD/YEN	60.15	60.14	0.02%		59.55	60.41
NZD/CAD	0.7908	0.7902	0.08%		0.7874	0.7949