The Opening Bell: Where currencies start on Thursday, June 1, 2017

By Dan Bell

The NZDUSD opens at 0.7097 (mid-rate) this morning.

The NZDUSD is attempting to push back above 0.7100 as I type, after stretching to a high of 0.7117 following yesterday’s business confidence data release.

The EUR has been the best performing of the G10 currencies over the past 24hrs with investors seemingly ignoring disappointing Euro-zone inflation data and buying EUR’s on the back of better than expected employment data. Headline inflation fell to 1.4% from 1.9% in April, with core inflation, which excludes energy, food, alcohol & tobacco, falling to 0.9% from 1.2%. Economists had forecast 1.5% for the headline and 1% for the core inflation. Euro-zone unemployment unexpectedly fell to 9.3% in April down from 9.4% in March, and now sits at its lowest level since March 2009 when the rate was 7.8%.

US data releases overnight once again sent mixed signals to investors with another fall in pending home sales for the month of April offsetting a stronger than forecast Chicago PMI data release.

Crude oil prices are falling as increased output from Libya and Nigeria is seen to be offsetting the supply limit deal between Saudi Arabia and Russia. US crude oil inventories data is due to be releases overnight, tonight.

This morning’s overseas trade index data release should have little effect on the currency while this afternoon the Australian retail sales and Capex data releases will dictate direction for the NZDAUD cross rate.

Global equity markets have edged lower – Dow -0.16%, S&P 500 -0.23%, FTSE -0.09%, DAX -0.11%, CAC -0.92%, Nikkei -0.14% Shanghai +0.23%.

Gold prices have edged higher, up 0.2% trading at $1,269 an ounce .WTI Crude Oil prices are down 2.8% trading at $48.36 a barrel.

Current indicative rates:

NZDUSD       0.7097       0.0%
NZDEUR       0.6311       -0.5%
NZDGBP       0.5505      -0.3%
NZDJPY         78.51       -0.1%
NZDAUD       0.9547       0.5%
NZDCAD       0.9587       0.4%
GBPNZD       1.8165       0.3%

Upcoming Data releases (NZST):

  • 10:45 – Overseas Trade Index q/q

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

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