The Kiwi outperformed all its major competitors in the last 24 hours after quiet ranges earlier in the week. The NZD traded a 73 point range to finish up 1.0% higher against the USD.
The FOMC meeting minutes yesterday morning at 8am showed that the Federal Reserve officials expressed confidence that they can raise interest rates gradually, while a hike “fairly soon” might be appropriate to avoid the risk of an overheated economy. The USD weakened 30 points on the data release and continued to weaken throughout the day.
The next U.S. Federal Funds Rate decision is Thursday 16th March at 7am NZ time. The market is pricing in a 38% chance of a rate hike at this meeting. Should they hike, the USD would strengthen and the NZD and AUD cross rates would move lower. For importers the current levels could be an opportunity to lock in some Forward cover for the next 3-12 months.
The number of Americans filing for unemployment benefits increased last week, while staying within a range that shows subdued firings. Jobless claims rose by 6,000 to 244,000 in the week ended Feb. 18, a report from the Labor Department showed Thursday. The four-week average declined to the lowest level since July 1973.
Oil futures remained higher Thursday after spiking to a session high following a smaller-than-expected rise in weekly U.S. crude inventories. U.S. crude supplies rose 600,000 barrels in the week ended Feb. 17. Analysts surveyed by The Wall Street Journal had forecast, on average, a 3.4 million barrel rise.
Overnight data tonight includes U.S. University of Michigan Consumer Sentiment and Inflation Expectations, U.S. New Home Sales, Canadian CPI.
Global equity markets are lower with Dow the exception- Dow +0.17%, S&P -0.01%, FTSE -0.42%, DAX -0.42%, CAC -0.09%, Nikkei -0.04%, Shanghai -0.30%.
Gold prices are up $16 or 1.3%, trading at $1,249 an ounce, WTI Crude Oil is up 1.5% overnight currently trading at $54.34 a barrel.
Current indicative rates:
NZDUSD 0.7231 1.0%
NZDEUR 0.6837 0.7%
NZDGBP 0.5760 0.1%
NZDJPY 81.44 0.2%
NZDAUD 0.9369 0.6%
NZDCAD 0.9478 0.3%
Upcoming Data releases (NZST):
- 11:30 – RBA Gov Lowe Speaks
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