The Opening Bell: Where currencies start on Thursday, July 20, 2017

By Dan Bell

The NZDUSD opens at 0.7355 (mid-rate) this morning.

Currencies have traded tight ranges over the past 24hrs with the USD continuing to underperform. Investors have sat on the side lines ahead of today’s monetary policy statements from the Bank of Japan and the European Central Bank.

Some economists now believe the BOJ could be about to discard their controversial 2% inflation target and extend their easing programme beyond 2019. Despite very low unemployment and improving confidence inflation remains well below their 2% target.

With the ECB about to break for summer holidays most economists believe the Central bank will hold steady this week and wait for till their September meeting before announcing roadmap toward winding down its easing measures. Since Mario Draghi’s speech in Sintra where he spoke of the possibility of “tapering” the ECB have tried dampen those expectations in an effort to prevent an unwanted tightening of monetary conditions.

A shock fall in domestic crude supplies has seen oil prices rise by 2% over the past 24hrs. This morning the Energy Information Administration announced US oil inventories fell by 4.7 million barrels for the week ended July 14. The fall was far greater than the expected 3.6M barrel decline.

Global equity markets have turned positive reversing yesterday’s fall – Dow +0.2%, S&P 500 +0.43%, FTSE +0.55%, DAX +0.17%, CAC +0.83%, Nikkei +1.0%, Shanghai +1.36%.

Gold prices have edged lower, down 0.2% trading at $1,241 an ounce .WTI Crude Oil prices have pushed higher, up 2.0% at $47.20 a barrel.

Current indicative rates:

NZDUSD       0.7355       0.0%
NZDEUR       0.6387       0.4%
NZDGBP       0.5649       0.2%
NZDJPY         82.29       -0.1%
NZDAUD       0.9247      -0.4%
NZDCAD       0.9264      -0.2%
GBPNZD       1.7702      -0.2%

Upcoming Data releases (NZST):

  • 13:30 – Australian Employment Report
  • Tentative BOJ Monetary Policy Statement

 

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

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