The Opening Bell: Where currencies start on Friday, July 21, 2017

By Dan Bell

The NZDUSD opens at 0.7407 (mid-rate)  this morning.

The NZD traded an 81 point range overnight (0.7334 to 0.7415) and opens above 0.7400. The NZD has gained 62 points or 0.8% against the USD from Monday’s open of 0.7345.

The Bank of Japan at their press conference delivered… nothing – no change. However, most critically, the BOJ admitted defeat of deflation and delayed the timing of reaching their 2% inflation goal to around FY2019.

In May 2017 the current account of the Euro Area recorded a surplus of €30.1 billion.  In the financial account, combined direct and portfolio investment recorded net acquisitions of assets of €100 billion and net incurrences of liabilities of €88 billion.

The European Central Bank (ECB) held interest rates steady overnight, amid speculation that the bank will start to scale back its ultra-loose monetary policy in the fall. Many market participants expect that improved economic growth in the euro zone will cause a shift away from years of easy money, underlined by interest rates being held at 0.00 percent for seventeen consecutive months.

U.S. Jobless claims decreased by 15k to 233k, forecast was 245k. Filings for U.S. unemployment benefits last week fell to the lowest since early May, reflecting growing demand for workers in a tight job market. The level in February was the lowest since the early 1970s.

U.S. Manufacturing activity in the region continues to grow but at a slower pace, according to results from the July Manufacturing Business Outlook Survey. Firms remained generally optimistic about future growth. More than one-third of the manufacturers expect to add to their payrolls over the next six months

In the 3 months to June 2017, the quantity bought (volume) in the U.K. Retail industry is estimated to have increased by 1.5% with increases seen across all store types. The growth for Quarter 2 (Apr to June) 2017 follows a decline of 1.4% in Quarter 1 (Jan Mar) 2017, meaning we are broadly at the same level as at the start of 2017.

Global equity markets are mixed:  Dow -0.04%, S&P 500 +0.07%, FTSE +0.77%, DAX -0.04%, CAC -0.32%, Nikkei +0.62%, Shanghai +0.43%.

Gold prices have edged lower, down 0.2% trading at $1,241 an ounce .WTI Crude Oil prices have pushed higher, up 2.0% at $47.20 a barrel.

Current indicative rates:

NZDUSD       0.7407       0.7%
NZDEUR       0.6369      -0.3%
NZDGBP       0.5707       1.0%
NZDJPY         82.93        0.8%
NZDAUD       0.9306       0.6%
NZDCAD       0.9317       0.6%
GBPNZD       1.7517      -0.2%

Upcoming Data releases (NZST):

  • 10:45am – NZD – Visitor Arrivals m/m
  • 10:45am – NZD – Credit Card Spending y/y

 

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

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