The Opening Bell: Where currencies start on Friday, September 8, 2017

By Dan Bell

The NZDUSD opens at 0.7226 (mid-rate) this morning.

The Kiwi is up against the USD and Pound, but has lost ground against the other major currencies overnight. The NZDUSD range this week has been 122 points (1.7%) and starts today up 85 points (1.2%) from Monday’s open.

The European Central Bank (ECB) left its benchmark interest rate unchanged overnight and made no reference to the anticipated wind-down of its stimulus program. President Mario Draghi had said at the last ECB press conference in July that discussions over the future of the central bank’s quantitative easing (QE) program could be expected in “the fall” – prompting many to speculate that he could detail a reduction in September.

In last night’s press conference Draghi said the ECB was reluctant to commit to a QE announcement date but it was likely to be October, and if the ECB isn’t ready in October “we can postpone our decision”. Their goal is to deliver inflation and their outlook for growth is broadly unchanged.

U.S. jobless claims surged last week by the most since November 2012 as tens of thousands of Texans displaced by Hurricane Harvey filed applications to collect benefits. Initial jobless claims increased by 62k to seasonally adjusted 298k, market consensus was for 245k. Applications filed in Texas surged by an unadjusted 51,637 from the previous week to 63,742 this week.

U.K. House prices rose by 1.1% between July and August, following a 0.7% increase in July.  Prices in the three months to August were 2.6% higher than in the same three months a year earlier. The annual rate in August is higher than in July (2.1%), however it has fallen from a peak of 10.0% in March 2016 when transactions grew sharply ahead of the introduction of new higher stamp duty tax rates for buy to let and second homes that came into effect in April.

Global equity markets are mixed: Dow -0.20%, S&P500 -0.05%, FTSE +0.58%, DAX +0.67%, CAC +0.26%, Nikkei +0.20%, Shanghai -0.59%.

Gold prices have rallied strongly, up $13 or 1.0% currently trading at $1,346 an ounce. WTI Crude Oil prices are down 0.1% currently trading at $49.07 a barrel.

Current indicative rates:

NZDUSD       0.7226       0.5%
NZDEUR       0.6011      -0.3%
NZDGBP       0.5514       0.1%
NZDJPY         78.36       -0.3%
NZDAUD       0.8985      -0.1%
NZDCAD       0.8762      -0.4%
GBPNZD       1.8136      -0.1%

Upcoming Data releases (NZST):

  • 10:45am – NZD – Manufacturing Sales q/q
  • 11:50am – JPY – Final GDP q/q & Current Account
  •  1:30pm – AUD – Home Loans m/m
  •  3:00pm – AUD – RBA Assist Gov Debelle Speaks
  •  8:30pm – AUD – RBA Gov Lowe Speaks

 

 

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

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