The Opening Bell: Where currencies start on Friday, February 2, 2018

By Dan Bell

The NZDUSD opens at 0.7385 this morning.

The Kiwi is stronger against the USD, JPY and AUD since yesterday morning’s Fed “no Rate hike” and FOMC statement, but modestly weaker against the EUR and GBP.

Britain’s manufacturers showed signs of a slowdown at the start of the year amid rising costs for raw materials, sending factory output to a seven-month low. The Markit/Cips UK manufacturing PMI index showed activity fell to 55.3 last month from 56.2 in December, missing forecasts of a further acceleration in growth. However, the PMI remained well above its long-run average of 51.7 and above the 50 mark which separates expansion from contraction.

U.S. Economic activity in the manufacturing sector expanded in January, and the overall economy grew for the 105th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM. The January PMI registered 59.1%, a decrease of 0.2% from the seasonally adjusted December reading of 59.3%. The New Orders Index registered 65.4%, a decrease of 2% from the seasonally adjusted December reading.

Operating conditions across the US manufacturing sector continued to improve in January, with the latest survey data indicating the strongest upturn since March 2015. Moreover, production levels and new orders grew at the quickest rates in twelve months. Rising global demand also drove a faster expansion in new export orders. Higher production requirements resulted in a sharp and accelerated increase in buying activity. At the same time, the rate of input cost inflation eased slightly but remained marked overall. Consequently, firms raised their selling prices at the second steepest pace since September 2014.

The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to a tightening labour market and strengthening economy at the start of the year. US Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 230,000 for the week ended Jan. 27. Data for the prior week was revised to show 2,000 fewer claims received than previously reported. Economists polled by Reuters had forecast claims rising to 238,000 in the latest week.

Overnight data tonight includes UK Construction PMI, US Average hourly earnings, US Non-Farm Employment Change, US Unemployment rate, US Uni. Of Mich. Consumer Sentiment revised and US Uni. Of Mich. Inflation expectations revised.

Global equity markets were mixed: Dow +0.48%, S&P500 +0.35%, FTSE -0.57%, DAX -1.41%, CAC -0.50%, Nikkei 1.68%, Shanghai -0.97%.

Gold prices are up 0.1% to USD$1,341 an ounce. Oil prices (WTI) surged 1.7% higher to USD$65.46 per barrel.

Current indicative rates:

NZDUSD 0.7385 0.3%
NZDEUR  0.5917 -0.3%
NZDGBP 0.5189 -0.1%
NZDJPY 80.91 0.5%
NZDAUD 0.9201 0.6%
NZDCAD 0.9073 0.0%
GBPNZD 1.9275 0.1%

Upcoming Data releases (NZST):

  • 10:45am – NZD – Building Consents m/m
  • 10:45am – NZD – Visitor Arrivals m/m

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Dan Bell is the senior currency strategist at HiFX in Auckland. You can contact him here »

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Source: CoinDesk