The Opening Bell: Where currencies start on Monday, August 14, 2017

By Dan Bell

The NZDUSD opens at 0.7312 (mid-rate) this morning.

The USD is lower across the board as yet again US economic data releases fell short of market expectations.

Late on Friday the US Labor Department reported a 0.1% rise in the consumer price index following an unchanged result in June. The result fell short of expectations with economists predicting the index to rise by 0.2%.  Core CPI prices (excluding food and energy prices) also inched up 0.1%, Vs expectations of a 0.2% rise. The disappointing results will cast doubts over the possibility of a Fed rate hike in December.

The ongoing geopolitical tensions which saw the VIX (a measure of market volatility) spike by 47% at the end of last week are likely to overshadow economic data releases and once again dictate direction.

Key domestic drivers for the NZD this week will be this morning’s retail sales data release along with Thursday’s quarterly PPI result, while on the international front monetary policy meeting minutes from both the RBA and the US will be closely monitored by investors.

Global equity markets closed out the week mixed – Dow +0.07%, S&P 500 +0.13%, FTSE -1.08%, DAX 0.00%, CAC -1.06%, Nikkei -0.05%, Shanghai -1.63%.

Gold prices continued to rally on Friday up 0.7% closing out the week at $1,294 an ounce for a weekly gain of 2.3%. WTI Crude Oil prices gained 0.5% on Friday pushing prices up to $48.82 a barrel for a weekly loss of 1.5%.

Current indicative rates:

NZDUSD       0.7312       0.4%
NZDEUR       0.6185      -0.1%
NZDGBP       0.5625       0.2%
NZDJPY         79.79        0.2%
NZDAUD       0.9265       0.4%
NZDCAD       0.9265       0.0%
GBPNZD       1.7777      -0.2%

Upcoming Data releases (NZST):

  • 10:45 – Retail Sales q/q
  • 14:00 – CNY Industrial Production y/y

 

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

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