The Opening Bell: Where currencies start on Thursday, April 5, 2018

By Dan Bell

The NZDUSD opens at 0.7308 (mid-rate) this morning.

The NZD has been the strongest performing of the G10 currencies, following a volatile night’s trading as the US and China trade war escalated.

Late yesterday afternoon and in retaliation to Trump’s plan to impose a 25% tariff worth $50 billion on 1,300 Chinese products, China announced the same tariff on a list of 106 U.S. goods under 14 categories, including aircraft, cars, soybeans, chemical products and orange juice.

The news sparked a sell-off in US equity markets as investors once again flocked to safe-haven currencies, with the USDJPY trading down to 106.00 before retracing the move as equity markets regained ground in the afternoon session.

The March ADP National Employment Report showed private sector employment increased by 241k jobs from February to March, well ahead of the expected 208k jobs, with February’s 235k jobs increase upwardly revised to 246k.

A pull back in the UK construction sector has seen the GBP underperform. Data from IHS Markit report showed the construction PMI fell to 47.0 in March from 51.4 in February, its largest contraction since June 2016. Economists had expected the index to edge down to 51.0.

Global equity markets remain mixed – Dow +0.28%, S&P 500 +0.13%, FTSE +0.05%, DAX -0.37%, CAC -0.20%, Nikkei +0.13%, Shanghai -0.18%.

Gold prices are little changed trading at $1,333 an ounce. WTI Crude Oil prices are holding steady, trading at $63.40 a barrel.

Current indicative rates:

NZDUSD 0.7308 0.8%
NZDEUR  0.5945 0.6%
NZDGBP 0.5191 0.7%
NZDJPY 78.04 1.0%
NZDAUD 0.9469 0.3%
NZDCAD 0.9329 0.5%
GBPNZD 1.9265 -0.7%

Upcoming Data releases (NZST):

  • 1:00pm -ANZ Commodity Prices m/m

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

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Source: CoinDesk