The Opening Bell: Where currencies start on Thursday, July 6, 2017

By Dan Bell

The NZDUSD opens at 0.7288 (mid-rate) this morning.

This mornings’ FOMC meeting minutes offered few surprises and had little effect on currency markets. The rate hike which was all but priced in by the market prior to the announcement came even after several officials voiced concern over the effect, or lack thereof, that their recent measures were having on financial markets. Fed officials noted that even in the face of four hikes in the rate since December 2015 equities have continued to gain and government bond yields have declined in recent months. The committee also discussed their plans to reduce the balance sheet with several policy makers were in favour of starting the reduction of its $4.5 trillion balance sheet within a “couple of months.”

Earlier in the day US factory orders for the month of May fell more than expected with the Commerce Department report showing orders declined by 0.8% following a 0.3% fall in April. Economists had expected factory orders to fall by 0.5%.

Euro-zone retail sales exceeded market expectations in May, with the Eurostat report showing retail sales increased by 0.4% on a monthly basis after recording a 0.1% increase in April. Retail sales had been expected to rise by 0.3%.

Crude oil prices have plummeted snapping the longest bullish streak in five years. The fall come after Russia said it would oppose any proposal to deepen OPEC-led production cuts, and a Reuters report showing OPEC’s exports rose in June.

Global equity markets have turned positive – Dow +0.02, S&P 500 +0.12, FTSE +0.14%, DAX +0.13%, CAC +0.10%, Nikkei +0.25%, Shanghai +0.76%.

Gold prices have slipped lower down 0.2% at $1,221 an ounce. .WTI Crude Oil prices have tanked currently down 4.2% trading at $45.12 a barrel.

Current indicative rates:

NZDUSD       0.7288      -0.1%
NZDEUR       0.6424      -0.1%
NZDGBP       0.5639       0.0%
NZDJPY         82.49       -0.1%
NZDAUD       0.9588      -0.1%
NZDCAD       0.9452       0.1%
GBPNZD       1.7733      -0.3%


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

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