The Opening Bell: Where currencies start on Friday, June 30, 2017

By Dan Bell

The NZDUSD opens at 0.7297 (mid-rate) this morning.

The NZD has underperformed over the past 24hrs, edging lower against all its major rivals. The AUD has been the strongest performing of the G10 currencies even managing to keep pace with the rising GBP and EUR.

The GBP and the EUR have extended their move higher on expectations of tighter monetary policy, while the AUD is benefiting from rising commodity prices and end of financial year rebalancing flows.

Overnight the BoE’s Chief Economist Haldane, who is part of the BOE’s Monetary Policy Committee fuelled speculation that the BOE are on the verge of tightening when he was quoted during a BBC interview “we need to look seriously at the possibility of raising interest rates to keep the lid on those cost of living increases.”

Euro-zone economic confidence increased more than forecast with the economic sentiment index rising to 111.1 in June up from 109.2 in May. The index is now sitting at its highest level since Aug 2007.

There was further good news for the Euro-zone with Germany’s consumer price inflation unexpectedly rising to 1.6% in June, up from 1.5% in May and confounding economists who had expected the rate to dip to 1.4%.

The US Commerce Department’s better than expected final reading for Q1 GDP had little effect on a softening USD. The report showed gross domestic product increased by 1.4% in Q1 a 0.2% improvement from the previously reported 1.2% increase.

Global equity markets remain mixed – Dow -0.76%, S&P 500 -0.91%, FTSE -0.51%, DAX -1.83%, CAC -1.88%, Nikkei +0.45%, Shanghai +0.47%.

Gold prices have edged lower, down 0.3% at $1,245 an ounce. .WTI Crude Oil has pushed up towards $45 a barrel currently sitting at $44.93.

Current indicative rates:

NZDUSD       0.7297      -0.2%
NZDEUR       0.6377      -0.6%
NZDGBP       0.5613      -0.7%
NZDJPY         81.76       -0.3%
NZDAUD       0.9495      -0.7%
NZDCAD       0.9484      -0.4%
GBPNZD       1.7815       0.7%

Upcoming Data releases (NZST):

  • 10:45 – Building Consents 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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