The Opening Bell: Where currencies start on Friday, September 1, 2017

By Dan Bell

The NZDUSD opens at 0.7178 (mid-rate) this morning.

The Kiwi failed to sustain its steady overnight recovery of the 0.7200 handle after yesterday afternoon’s downbeat NZ business confidence numbers, and starts Friday down 0.75% from Monday’s open.

U.S. Initial Claims for the week ending 26 August was 236,000, an increase of 1,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 236,750. Claims have now been below 300,000, a threshold associated with a robust labor market, for 130 consecutive weeks. That is the longest such stretch since 1970, when the labor market was smaller.

U.S. consumer spending rose slightly less than expected in July and annual inflation increased at its slowest pace since late 2015, which could bolster expectations that the Federal Reserve will delay raising interest rates until December.

U.S. Personal income increased $65.6 billion (0.4%) in July according to estimates released overnight by the Bureau of Economic Analysis. Disposable Personal Income (DPI) increased $39.6 billion (0.3%) and Personal Consumption Expenditures (PCE) increased $44.7 billion (0.3%). Real DPI increased 0.2% in July and Real PCE increased 0.2%. The PCE price index increased 0.1%.

Canada’s economy unexpectedly accelerated in Q2 to 4.5% annualized pace amid the biggest binge in household spending since the last recession. Economists had anticipated a 3.7% rise in GDP. The surge in growth should help cement the chances the Bank of Canada will continue raising interest rates in coming months as the nation’s economy nears full capacity.

Major data releases tonight includes: U.S. Unemployment rate, U.S. Non-Farm Employment change, U.S. Average Hourly Earnings, and U.S. ISM Manufacturing.

Global equity markets are higher again except China: Dow +0.29%, S&P 500 +0.61%, FTSE +0.89%, DAX +0.44%, CAC +0.58%, Nikkei 0.72%, Shanghai -0.08%.

Gold prices are sharply higher currently trading at $1,321 an ounce. WTI Crude Oil prices surged a big figure higher, up 2.3% trading at $47.10 a barrel.

Current indicative rates:

NZDUSD       0.7178      -0.3%
NZDEUR       0.6028      -0.4%
NZDGBP       0.5551      -0.3%
NZDJPY         78.92       -0.6%
NZDAUD       0.9028      -0.9%
NZDCAD       0.8963      -1.3%
GBPNZD       1.8011       0.3%

Upcoming Data releases (NZST):

  • 10:45am – NZD – Overseas Trade Index q/q

 

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

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