The Opening Bell: Where currencies start on Friday, May 26, 2017

By Dan Bell

The NZDUSD opens at 0.7024 (mid-rate) this morning.

The Kiwi opens modestly lower against most currencies but is up against the AUD and CAD. For the week the Kiwi is up 1.3% against the USD and EUR, up 1.5% versus the AUD, up 1.8% versus the JPY, and is up 2.0% against the Pound.

OPEC and non-members led by Russia decided overnight to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude after seeing prices halve and revenues drop sharply in the past three years.

Oil prices dropped more than 5% as the market had been hoping oil producers could reach a last-minute deal to deepen the cuts or extend them further, until mid-2018.

OPEC’s cuts have helped to push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.

UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.2% between Quarter 4 2016 and Quarter 1 2017.

U.S. jobless-benefit claims inched up last week, while still hovering near levels that reflect a strong labor market. U.S. Initial benefit filings increased by 1k to 234k, forecast was 238k.

The U.S international trade deficit was $67.6 billion in April, up $2.5 billion from $65.1 billion in March.

Global equity markets are mainly higher – Dow +0.37%, S&P 500 +0.53%, FTSE +0.04%, DAX -0.17%, CAC -0.08%, Nikkei +036% Shanghai +1.43%.

Gold prices are up $1 trading at $1,255 an ounce. WTI Crude Oil prices have plummeted 5.1% to be trading at $48.71 a barrel.

Current indicative rates:

NZDUSD       0.7024      -0.3%
NZDEUR       0.6267      -0.1%
NZDGBP       0.5428      -0.1%
NZDJPY         78.52       -0.2%
NZDAUD       0.9419       0.2%
NZDCAD       0.9472       0.2%
GBPNZD       1.8412      -0.3%


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

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