The Opening Bell: Where currencies start on Friday, October 6, 2017

By Dan Bell

The NZDUSD opens at 0.7114 (mid-rate) this morning.

The US Dollar was the strongest performer overnight as the Kiwi opens on a 4 month low. The NZD has traded a 1.8%, 133 point range this week, and opens this morning 2 points off the overnight and week’s low of 0.7112 – a level not seen since the 2nd of June 2017.

Australian Retail sales yesterday posted their biggest fall in about four-and-a-half years, plunging 0.6% in August. Australian Trade Balance in trend terms, was a surplus of $735m in August 2017, a decrease of $282m on the surplus in July 2017. In seasonally adjusted terms, the balance on goods and services was a surplus of $989m in August 2017, an increase of $181m on the surplus in July 2017.

Canada’s merchandise trade deficit totalled $3.4 billion in August, widening from a $3.0 billion deficit in July. Exports decreased 1.0% on lower volumes, while imports were unchanged. Following two months of large decreases, exports were down a further 1.0% to $43.6 billion in August—despite increases in 6 of 11 sections.

In the week ending September 30, the advance figure for seasonally adjusted initial claims was 260,000, a decrease of 12,000 from the previous week’s unrevised level of 272,000. The 4-week moving average was 268,250, a decrease of 9,500 from the previous week’s unrevised average of 277,750. Hurricanes Harvey, Irma, and Maria impacted this week’s claims.

The U.S. Goods and Services Trade deficit was $42.4 billion in August, down $1.2 billion from $43.6 billion in July, revised. August exports were $195.3 billion, $0.8 billion more than July exports. August imports were $237.7 billion, $0.4 billion less than July imports. The August decrease in the goods and services deficit reflected a decrease in the goods deficit of $0.9 billion to $64.4 billion and an increase in the services surplus of $0.3 billion to $22.0 billion.

New orders for U.S.-made goods rose in August and orders for core capital goods were stronger than previously reported, suggesting robust business spending could help offset some of the economic drag of Hurricanes Harvey and Irma. Factory goods orders increased 1.2% as demand for a range of goods rose. Orders fell by an unrevised 3.3% in July.

Overnight tonight data includes Canadian Employment Change and Unemployment rate, U.S. Average Hourly Earnings, Non-Farm Employment Change and Unemployment rate, U.S. Consumer Credit, and FOMC Members Dudley and Kaplan are delivering speeches.

U.S. Bank Holiday on Monday for Columbus Day. Canadian Bank holiday for Thanksgiving and Japanese Bank holiday on Monday in observance of Health Sports Day.

Global equity markets are higher:  Dow +0.41%, S&P 500 +0.50%, FTSE +0.54%, DAX -0.02%, CAC +0.30%, Nikkei +0.01%, Shanghai Closed.

Gold prices are modestly lower down $3 or 0.2% at $1,269 an ounce. WTI Crude Oil prices have rallied strongly overnight up 1.4% at $50.61 a barrel.

Current indicative rates:

NZDUSD    0.7114     -0.6%
NZDEUR    0.6078     -0.2%
NZDGBP    0.5421      0.4%
NZDJPY      80.25      -0.7%
NZDAUD    0.9127      0.1%
NZDCAD    0.8941      0.0%
GBPNZD    1.8437     -0.4%


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

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